Redbox in Australia
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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

Redbox in Australia Redbox in Australia Presentation Transcript

  • automated dvd rental
    Kristy DumlaoJordan NelsonHilary LaBrashJennifer Noinaj
    1
  • Agenda
    Project Description
    Cultural Analysis
    Economic Analysis
    Competitive Market Analysis
    Marketing Plan
    Conclusions
    2
  • 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
  • How to Rent
    4
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • Country Analysis
    Population: Over 25 Million
    Leveling population growth
    Birth rate slowing
    Population Density
    93% in urban areas
    Migration towards urban areas
    Ethnicities
  • 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
  • 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
  • Communication
    Telephone (21 million)
    Mail
    90% access to internet
    Increasing usage of web 2.0 applications
  • 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
  • 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
  • Labor Force and Inflation
    Size:
    10,770,200 (Euromonitor)
    Growing Demand
    Unemployment Lowering
    Under 5% in 2008
    Inflation
    Under 3% for past 5 years
  • 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
  • Who’s the competition?
    Brick-and-mortar rental stores
    Online rental websites
    Self-serving rental kiosks
    Video on demand service
    20
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • Product Introductions
    Pricing AU$2
    24-hour rental period
    Machines accessible 24/7
    Read reviews and watch trailers
    DVD recommendations
    27
  • 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
  • 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
  • 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.
  • 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
  • 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
  • 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
  • Recommendations
    Pricing strategy
    Better movie selection
    Longer rentals
    Strong market
    More locations
    34
  • 35
    Questions?