Why Is Redbox Afraid Of The Big Bad iPhone?

Davis Freeberg —  March 26, 2009

Over the last few years, Redbox has been able to build an impressive DVD rental network by being innovative and flexible while their competitors were still laughing at the concept of kiosk rentals. Over time they’ve added features to the Redbox website that allow customers to browse and reserve titles online. They’ve linked their kiosks together so that unlike competitors (ahem: Blockbuster), you can actually rent a movie from one location and return it at another. Redbox’s core business may ultimately be, plain old boring physical DVD rentals, but there’s no denying that they’ve been an innovator in their industry. Which is why I am so perplexed by their most recent decision to go hostile against iPhone owners.

Given the company’s reputation for thinking progressively, I was disappointed to learn that they’ve decided to take a technological step backwards by putting pressure on the Inside Redbox blog, to kill their Inside Redbox iPhone application.

I haven’t jumped on the iPhone bandwagon myself yet, but I can understand why some people think of their phones as an extra appendage. The apps store was a brilliant move by Apple and has created all kinds of interesting software programs that wouldn’t have existed if people had to rely on big companies to build them.

By taking advantage of the GPS features inside the phone, Inside Redbox was able to give iPhone customers the ability to look up which Redbox was closest to them at any given moment. It also allowed customers to find out whether a specific title was available before wasting time visiting the kiosk in person.

The best part about the application though, was it’s ability to reserve movies directly from the iPhone. This means that if you’re standing in line at a Redbox and the person ahead of you is taking too much time selecting a movie, you could theoretically use your iPhone to digitally cut in line and reserve the last copy of Harold and Kumar instead of having to wait impatiently.

When you consider that one of the biggest customer service complaints about Redbox are the long lines, it blows my mind that Redbox would discourage consumers from using their own mobile device by having them monopolize a kiosk instead.

Whether a customer prefers to order their movies from the internet, a kiosk or the middle of the store while shopping for groceries shouldn’t make a difference to Redbox. No matter what, they are still making a sale, even if they don’t have 100% control over the purchase.

Inside Redbox is mum on details and calls to Redbox’s PR agency didn’t shed any light on the situation, but the two most “controversial” features included in the app is a list of codes for free Redbox movies and the fact that the app relies on Redbox’s website for most of the content.

One theory for why Redbox doesn’t seem to care about iPhone customers is that while they’ve been able to get a lot of buzz using their free movie offers online, consumers haven’t been all that aggressive about redeeming the promotions. Since iPhone customers have access to the most recent free offers while they are actually standing in front of the Redbox kiosk, it makes it easier for customers to take advantage of their specials.

If this is the reason why Redbox killed the application, my response would be that Redbox hasn’t solved their problem, they’ve just made it more difficult to work out a reasonable compromise with their customers. It won’t take consumers very long to figure out that they can bookmark Inside Redbox’s list of free codes or RedboxCodes.com on their iPhones and still have access to the same information.

Rather then fighting progress, Redbox should be using the relationships formed through the application to streamline their movie promotions. They already restrict some of their offers to new customers only, so why can’t they work out a deal for iPhone promotions? Wouldn’t it be better for Inside Redbox iPhone users to have a 10% chance at “winning” a free movie instead of killing the app and forcing these customers underground? By trying to lower the wham hammer on this neat little application, they’ll only end up upsetting customers instead of addressing a weakness in how they’ve choosen to promote their service. Just because the iPhone app doesn’t fit into their mold of what marketing should be, doesn’t mean that killing it is the best solution.

A second theory for why Redbox may have requested that the app be pulled is that Inside Redbox uses Redbox.com’s website for a healthy chunk of their content. Some businesses may object to this and want to have 100% control over how their customers are “allowed” to use their product, but smart companies see the benefits of being open. In fact open API’s are becoming increasingly common in the tech industry. By allowing third parties to mashup and repurpose your data, entirely new creations are possible. This is why some of the most successful companies have business models that encourage outsiders to partner with them. The Inside Redbox app may repackage content from Redbox’s website, but when push comes to shove, it’s really no different than an internet browser. Is it really better for Redbox to force their customers to have a subpar experience using the Redbox.com website on the iPhone instead of an app that is specifically designed to be viewed on the small screen? I don’t think so.

Asking Inside Redbox to pull their program is a bit like asking Microsoft to not allow Redbox’s website to be shown on Internet Explorer. If Redbox really objects to how their content is being used, they have the power to change it. Instead of trying to kill the third party programs that tap into what they’ve already created, they should be encouraging their fans to mix, mash and experiment to create new experiences for their customers.

To date, Redbox has managed to stay ahead of the competition by being nimble and by nurturing a passionate and dedicated fan base. Their decision to now turn on the very fans who cared about them long before their mainstream momentum, says a lot about how fickle their business decisions really are. Instead of acting like the innovator that I know they are, they are acting like a big media company. Hopefully, Redbox comes to their senses and “authorizes” the use of an app that only makes their service more valuable to their customers.

Davis Freeberg is a technology enthusiast living in the Bay Area. He enjoys writing about movies, music, and the impact that digital technology is having on traditional media. Read more at Davis Freeberg’s Digital Connection.

10 responses to Why Is Redbox Afraid Of The Big Bad iPhone?

  1. David Van Benthuysen March 26, 2009 at 8:21 am

    Redbox offers a great service at a great price. It is quick, easy & painless for non-geeks to embrace. While the free codes they offer are nice, I always found them unnecessary. $1.06 per rental beats Netflix & PPV. I know that the codes are out there, but I would rather have Redbox continue to expand.

  2. Hi David, I don’t think that this app is so much about free codes as it is Redbox losing control over their web interface. I guess the point I was trying to make is that if they are zapping the app because of the code feature, it doesn’t solve their problem. The codes are still available to anyone who wants them and if they’re uncomfortable with sites like Inside Redbox or Slickdeals.net collecting and posting these codes, killing the iPhone app isn’t going to put a stop to it.

    Instead of fighting with their customers to preserve their legacy way of doing business (free codes for promotion), they should be working with them to provide an even better solution for consumers. By tweaking how they do their codes, they could essentially have their cake and eat it to, but instead they’ve chosen to attack some of their longest and most dedicated fans by taking away a small, but loved program. In my mind, killing the app over how someone is repackage Redbox’s own marketing is a bit like the record companies refusing to sell songs on iTunes because they’re available on the Pirate Bay. It just doesn’t make any sense and instead of providing a legitimate way to reach their customers, they’re forcing them to use a telephone browser to read a web page that was designed to be seen on a monitor.

  3. Aha. It wasn’t until the end of your piece that I figured out that “Inside Redbox” isn’t affiliated with Redbox. This isn’t a business decision to “go hostile against iPhone owners,” or pulling support for a service or feature they offered to iPhone owners. It’s a decision to maintain control over the way their content is used. It’s their content, and it’s theirs to control. Your rant about Redbox seeming to “turn on” its fans is silly. Perhaps you could, instead of ranting about a company asserting control over its proprietary information, encourage them to make official tools available that would meet the same needs currently being partially served by unofficial hacks.

  4. I apologize if I wasn’t clear, but the Inside Redbox Mobile app is an “unauthorized” third party app. You’re welcome to argue that this makes it some kind of a hack, but most of the iPhone apps are “unofficial” and we don’t typically see outside companies step in to kill them. All I want to know is why Redbox objects, but they won’t talk about it.

    I would equate the Inside Redbox app to something like the iFlix app for managing your Netflix queue. Definetely not created by Netflix, definitely cool for the fans though and a useful way to make Netflix more valuable to their customers. Netflix doesn’t complain because they understand that they can’t do everything and if a fan wants to experience Netflix different then that, it is apparently fine by them.

    I would also like to clarify that when I say that Redbox has turned on their fans, I’m not talking about customers who rent a DVD once a month. I’m talking specifically about Inside Redbox and other members of the Redbox community who’ve devoted a tremendous amount of time, energy, money and passion towards furthering the success of Redbox. If you’re one of the people who bought the app, you’re more or less screwed now because of Redbox’s actions.

    Inside Redbox was one of (if not THE) first blogs to specifically cover all Redbox news. Over the last five years, they’ve scoured the net for obscure articles, details and information that would be of interest to Redbox’s small, but dedicated (and growing) customer base. By forcing Inside Redbox to remove the app, instead of negotiating a mutually acceptable solution, Redbox is essentially saying we don’t care that IR loved their service so much to devote a (un)healthy amount of their life to sharing info about them and writing code for programs like they, they only care that it’s unauthorized, so Redbox devotees can go kick rocks.

    Redbox may have the right to object to the app, but that doesn’t make it the right thing to do.

    They could of handled this diplomatically, but instead have chosen to take the position that they’re too bog now to talk with bloggers and fans who’ve spent so much of their time and energy promoting the company for them. Even if they still killed the app, it would have been better for them to at least engage in a conversation, instead of using intimidation to force the app to be removed.

    What I really liked about your comment though, was that you hit the nail right on the head when you wrote “It’s a decision to maintain control over the way their content is used”

    When you look at the mashup culture that we live in, there are many content owners who’ve objected to how their customers are remixing their creations into new works of art, but the end result has only reinforced the original content and added value to the content owners.

    This is a case where long time fans took a big risk developing something that Redbox failed to create. Instead of celebrating this, they’re attacking it? That doesn’t make sense to me. I don’t understand how Redbox is helped by this. Even if they wanted to release an official app, what is the harm in giving consumers more options for how to interact with their product? Redbox may want to assert control, but we live in a world now where customers are increasingly taking control over their content and experience. If Redbox is struggling to adapt to this culture shift with a DVD model, how will they fair once they move to the internet?

    You may not feel like they’ve turned on you, but when they take hostile action against long time devoted members of their community, I’m going to call them out on it.

  5. One thing that I think is overlooked when the debate of “content ownership” is fired up is the fact that no content is safe if you PUBLISH it. Regardless of the medium, this could be a problem; the only way to prevent it, is to not publish it.

    Secondly – Redbox’s content is recycled material anyhow. They didn’t designate the rating or design the movie box picture. I am sure the developers of said app could get the info elsewhere (they already do for yahoo ratings).

    Third – If their gripe is about the “penetration” of the contents of individual kiosks, they should have thought about that before using an open standard such as Web Services.

    In the end – this is a knee-jerk reaction, and I hope the executives at redbox have the sense to make ammends.

  6. Don’t rent from Redbox – serious con – many nightmares. They bill your creditcard through fradulent charges. Buyer beware. It has happened to me with over $50 charged for 2 movies I rented for just 1 night with a free coupon tag. The machine accepted the movies on return but redbox kept charging. As it was a 1 dollar charge I overlooked it. I had a clear look at my bill and then called Redbox who then claimed they could not see the movie… What a rip off – need to update their technology.

  7. @Dan Richards
    That is your fault for “overlooking” a $1 charge. IT is never perfect… it is your job to make sure you don’t get charged too much.

  8. I think redbox iphone service is good but they should not lose their old customers, give them as much benefit and promotions as for the new customers. Thanks for the info on redbox.

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