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Redbox in Australia

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  • Australian Visual Software Distributors Association
  • -Australian DVD sales and rentals worth $1.27 billion from 2007-8-and further support that…-titles that did well in film industry expected to help increase australian rental markets….
  • -australians used to this form of payment-leisure sector of consumer spending growing-convenienceThree types of competition
  • -3 major types of DVD rental methods-quickflix:netflixs
  • Store hours are enforced and store not readily accessible late at nightCertain stores online reservationsA few things to highlight about the storesCould not find details on late fee policiesDiscount codes: include free rentals, a reduced rental fee, or a discount for renting numerous DVDs at once obtained through: frequent rental from a user, suggesting friends or family to the rental service, first time signup onto the e-mail list, or signing up through the SMS serviceRental Guarantee where the title is Rent It Now Or Rent It Free; Price Guarantee where the title is at the Cheapest price in Australia or they will match the price a $1 lower; Quality Guarantee where ex-rental DVDs are in quality condition or customers can return it for an exchange.NV: donate cans free weekly rental vouchers
  • Hard to find titlesSit down and browsePay more if exceed membership contract
  • Transcript

    • 1. automated dvd rental
      Kristy DumlaoJordan NelsonHilary LaBrashJennifer Noinaj
      1
    • 2. Agenda
      Project Description
      Cultural Analysis
      Economic Analysis
      Competitive Market Analysis
      Marketing Plan
      Conclusions
      2
    • 3. What is Redbox?
      Founded 2003
      17,500+ kiosks in US
      US$1+tax/night
      575 million+ rentals
      Leading grocery and convenience stores
      700 DVDs
      200 new release titles
      New movies on Tuesday
      3
    • 4. How to Rent
      4
    • 5. DVD Kiosk Rentals in the US
      Coinstar, the owner of RedBox, had “more than doubled its second-quarter revenue from a year earlier after almost doubling its number of kiosks to almost 18,000 and boosting sales per machine by 33%” (Graser, 2009).
      5
    • 6. Facts and Characteristics
      Official Language: English
      Political Structure: Parliamentary Democracy, Relatively Stable
      Location: Island between Indian and South Pacific Ocean
      Historic conflict between British colonists and Aboriginals, also between Great Britain and colonists
      Major religions: Catholicism and other denominations of Christianity
      Education: Required through age 15-16, literacy rate of 99%
      6
    • 7. Cultural Trends
      Australians are increasingly becoming “time-poor”, they look for more on-the-go options for regular activities, including meals
      Young people are getting married later and live alone longer
      Because of the economic downturn, people are looking for cheaper leisure activities
      7
    • 8. Leisure Activities
      “Audio-visual” is the fastest growing form of leisure consumption, with Australians spending more than half their time on this type of leisure activity
      Obesity is a growing problem, but many Australians participate in sports to offset this trend
      8
    • 9. Film and DVD Industry
      Large online DVD rental industry, and online rental sales have increased even though traditional retail rental sales have dropped
      Australians tend to prefer US films, but certain Australian films still find large-scale success
      9
    • 10. Sales & Players
      2007: AVSDA acquired AU$211.4 million video sales from the 13.2 million copies sold to rental stores
      2007: video rentals generated revenue of AU$522 million
      4th globally in purchasing DVD players
      97% households had at least one with average of 1.7 players
      10
    • 11. Get ’emwhile they’re red hot!
      Australian DVD sales and rentals were AU$1.27 billion from 2007-2008
      Australian DVD rental market brings in about AU$2 billion each year
      Popular titles in the film industry helped increase Australian rental markets from 2% in 2007-2008 to at least 10% in 2008-2009
      11
    • 12. Country Analysis
      Population: Over 25 Million
      Leveling population growth
      Birth rate slowing
      Population Density
      93% in urban areas
      Migration towards urban areas
      Ethnicities
    • 13. Economic Analysis
      GDP: US$1,118,112,100
      Growth rate: 1.9%
      Expected to slow in future
      Income per capita: US$47,071
      Family income: US$53,002
      Distribution of Wealth
      30% making lower than US$20,000/year
      40% between US$20,000 and US$40,000
    • 14. Resources and Transportation
      Major Resources
      Oil
      Steel
      Major Modes of Transportation
      Cars & air transportation
      Similar to the United States
      Major ports at Sydney and Melbourne
    • 15. Communication
      Telephone (21 million)
      Mail
      90% access to internet
      Increasing usage of web 2.0 applications
    • 16. Balance of Payments and Exchange Rate
      Balance of Payments
      -US$16,985,000 in 2008
      Trending upwards
      Exchange Rate
      .79 against the USD
      Trending upwards
    • 17. Trade Analysis & FDI
      Import Taxes
      High taxes among corporations
      Other losses of revenue:
      Customs
      Licenses
      No embargos or quotas
      Tariffs change with quantity and item
      Must apply for information
      Foreign investment in growing Industries
      Housing, Transportation, Leisure and Alcohol
      Redbox in Leisure industry
    • 18. Labor Force and Inflation
      Size:
      10,770,200 (Euromonitor)
      Growing Demand
      Unemployment Lowering
      Under 5% in 2008
      Inflation
      Under 3% for past 5 years
    • 19. redbox in a nutbox
      Relative Advantage
      Internet access
      Compatibility
      Lifestyle & access to DVD players
      Utilizes credit or debit card transactions
      Leisure sector
      Complexity
      Credit or debit card transactions
      Screen instructions & email address
      Case
      Trialability
      Time & price
      Observability
      Word of mouth
      Foot traffic and utility of retail and grocery stores
      19
    • 20. Who’s the competition?
      Brick-and-mortar rental stores
      Online rental websites
      Self-serving rental kiosks
      Video on demand service
      20
    • 21. In-Store Profile
      NAMES: Blockbuster, Video Ezy, Civic Video and Network Video
      LOCATION: all across Australia
      AVAILABILITY: store hours
      FEATURES:
      Titles, games, Blu-Ray, browsing, movie cover & synopsis
      Online reservations
      ADVERTISEMENTS:
      Discount codes & prize packs.
      Civic Video: Terrific Tuesday, disc cleaning, AU$1 Tuesdays, 4 Movie Hires for AU$12, 5 Kid Flicks for AU$5
      Network Video: Cands4Films Festival
      DEALBREAKERS??:
      Average new releases AU $4.60 & older movies AU $1.60
      Blockbuster : AU$4.95 -AU$7.95
      Video Ezy: AU$6 DVDs and AU$7 Blu-Ray Discs
      Civic Video: AU$4.95 for DVD /Blu-Ray Discs
      Network Video: varying costs higher than kiosks
      Late fee policies
      21
    • 22. Online Profile
      NAME: Quickflix
      LOCATION: Internet
      AVAILABILITY: whenever you’re online
      FEATURES:
      Titles, Blu-Ray, online browsing and request titles
      No late fees
      Trailers and reviews
      ADVERTISEMENTS:
      Free trial with subscription or rental vouchers as gifts for family and friends
      DEALBREAKERS??:
      Wait time for DVDs
      22
    • 23. Kiosk Profile
      NAMES: Oovie and RedRoom DVD
      LOCATIONS: limited areas of Australia
      Oovie in NSW and VIC (~80)
      RedRoom in NSW, QLD and VIC (~85 by end of 2009)
      supermarkets and shopping malls
      AVAILABILITY: 24/7
      FEATURES:
      new releases, games, touch screen, simple DVD case
      RedRoom: view pictures, watch trailers, read reviews, multiple kiosks at one location, manned at peak times but closed otherwise and accessible with membership card
      ADVERTISEMENTS:
      Discount codes
      Oovie: 2 for 1 promo code but expires within two days
      Free Oovie Wednesdays
      RedRoom: membership cards
      DEALBREAKERS??:
      RedRoom: AU$2.95 for SIX hours, sooner return, less it costs
      InstantDVD: AU$2.99 per day until 7pm the following night
      23
    • 24. More on boxing people in!
      Distribution of Product
      Woolworths, Safeway, IGA, BI-LO, Aldi, 7-Eleven and McDonalds.
      Advertising and Promotion
      television commercials and endorsements, outdoor advertisements, radio excerpts, internet ads, location of machines
      DVD kiosks discounts for first-timers and loyal users which can be distributed through stores where kiosks located
      24
    • 25. Red Lights for Redbox in Australia
      Brand loyalty (Oovie & RedRoom)
      Credit information
      Screen Australia
      Redbox lawsuits
      Piracy issue
      Cost AU$230 million
      47 million pirated DVDs in circulation while 52 million legitimate DVDs sold
      2007: conducted 85 raids
      Internet piracy
      Australian Federation Against Copyright Theft awareness
      25
    • 26. Marketing Considerations
      Targeting Objectives
      Young adults ages 18-24
      Both genders
      In college or starting new career
      Marketing Objectives
      80% awareness of the product with a 75% experience rate
      Gain 60% retention ratio and create a loyal customer base
      Positioning Objectives
      Low pricing strategy: AU$2/night
      User-friendly and convenient
      26
    • 27. Product Introductions
      Pricing AU$2
      24-hour rental period
      Machines accessible 24/7
      Read reviews and watch trailers
      DVD recommendations
      27
    • 28. Market Penetration
      100 machines in Sydney
      4.4 million people
      Supermarkets
      Aldi, Franklins, Ritchies, Supabarn
      Fast food restaurants
      Chicken Treat, Donut King, Eagle Boys, Oporto, Grill’d
      Fitness centers
      Fitness First & Goodlife Health Club
      28
    • 29. Distribution
      iMOZI – Digital media kiosk designs
      Distribution Agreements
      Summit Entertainment
      Lionsgate
      Sony Pictures Home Entertainment
      Motion Picture Distribution Association of Australia
      Australian Visual Software Distributors Association Ltd
      Additional film distributors
      Anchor Bay Entertainment, Hopscotch Films, Hoyts Distribution
      29
    • 30. Marketing Communications
      Internet Advertising
      CPM very low
      Penetration to 90% of population
      Large usage by target demographic
      Guerilla Advertising
      Receipts
      Placement in high traffic areas
      Not using TV or print
      Easy $2 DVD Rentals. No Late Fees.
      Rent and Return at many Locations
      Many locations near you.
    • 31. Advertising
      Small Budget
      Operating margin
      Similar to the US advertisement
      Analysis of Media Costs
      Lower cost for internet
      Existing partnerships
      Large TV advertising costs
      Print advertisement
    • 32. Promotions
      In-store coupons from stores that have Redbox machines
      Free rental
      Reduced rental fee: AU$1
      Discount codes: email list & SMS service
      First-time use: One free rental for signup on e-mail list & on SMS service
      Repeat use: One free rental after 15 movies or suggesting friends/family
      Discount for renting numerous DVDs at once: 3 DVDs for AU$5
      32
    • 33. Resource Requirements
      DVD equipment: 100 machines
      Kiosk & maintenance (AU$6 million)
      Maintenance includes labor
      DVDs & casing (AU$2 million)
      Transportation (AU$2 million)
      Marketing costs: advertising & promotions (AU$1 million)
      Break-even: 15 DVDs/day
      33
    • 34. Recommendations
      Pricing strategy
      Better movie selection
      Longer rentals
      Strong market
      More locations
      34
    • 35. 35
      Questions?

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