If you are like me and NOT currently subscribing to Netflix, then you might have come across redbox. I decided to give it a try last week after our local Blockbuster raised their prices and re-instituted late fees. Blockbuster now costs $4 for any movie, new or old, and you only get them for 4 days. So, basically if you rent two per month you’d pay off your Netflix subscription. redbox on the other hand is only a buck. It’s a great value. What struck me more than anything else is the simplicity of the redbox service. It’s a winning recipe employed by a lot of the companies I respect most these days. And last Saturday night simplicity had more people standing outside Walgreens renting movies from a box than were in the entire blockbuster store right down the block.
Here’s how it works for a first time customer. While waiting you can browse the titles on a nice display next to the box. When it’s your turn you touch the screen, hit the “rent movie” button, and start browsing for the movie you want. When you find the one you want, throw it in your cart and check out. At that point you scan your credit card, enter your email address, and grab the movie as it comes out of the slot. That’s it. The rules are simple. Get it back the next night by 9pm for $1, or pay $1 for each extra night. After 25 nights, the movie is yours. So simple, a buck per day. Come back again and they’ll remember your email address which cuts the process down another step.
redbox is going to destroy a seriously floundering Blockbuster. No surprise that Blockbuster has been losing to Netflix, Apple, and Amazon but now they are actually losing the in-person rental business to a vending machine. And picking up movies in person is going to be a viable business for a long time coming. I think it shows that simplicity is the quickest way to disrupt a market. Complicated pricing, no matter how smart, loses. More steps to sign-up/check-out loses. Too many rules definitely loses.
In my mind, this is the recipe for success at Zappos. They don’t have any rules. You want to buy 50 pairs of shoes and return all of them, fine. Not satisfied with a pair of shoes that you purchased? They’ll take them back. They won’t hit you with a bunch of complicated rules and exceptions like most companies do. Why do I have to hunt around for free shipping coupons every time I buy something online? It’s a drag, makes things too complicated and leaves me way too much time rethink my purchase.
You want to disrupt a market? Make things easier in earnest. I know it seems easier to rent from iTunes than blockbuster, but for most people it’s really not. Signing up, credit cards, usernames & passwords, downloading, goofy rules, watching on a computer. Those things aren’t simple. Blockbuster loses because late fees aren’t simple and of course it’s not simple to spend 4 times as much on a rental. redbox is doing a great job and I’m happy to have one down the street. The movie “2012″ on the other hand? Not so hot.
