My last blog post I talked about RedBox kicking HV’s butt.
They answered RB’s competitive run at their market by introducing a “$1 no matter how long you have it” video rental. Get a FREE RedBox movie rental here.
They erroneously believe the chink in RB’s armor is that they charge $1/day as long as you have it. When, to me, that’s NOT the top thing people might dislike about RB. Because, right now, I pay $4.99 on DishNetwork for a rental that I can only watch during a 24-hour period. That’s 5x as much.
I think waiting in line is one problem. I think being in the weather is another problem (how do those things work in 110 degree heat or 5 degree cold?). I think the lack of privacy is kind of one, too. I know I felt artificial pressure the first time I rented since a line formed almost immediately behind me. I also think the return process needs to be simplified. But, these things can be overcome, I believe.
All that aside…
Here’s a list of things HV should be doing and should have been doing all along…
- an obvious thing: buy RedBox and expand the biz.
- replace their existing huge stores with small footprint (low $) human-less dispensers – BLUE BOX
- Rent movies by the bundle – $10 for up to 12 movies. (Increase sales/client = increase profit/client)
- sell bundles of crap with a movie rental – 5 movies, 2 bags of micro popcorn, 5 candy bars and a 2-liter bottle of pop for $15.
- develop, nurture and communicate with their clients. Email at the very least. RedBox has that down. They give away a movie to acquire an email address. What if they operated at break-even, of $1. That means they’re paying $1 to get an email address they can begin to nurture the client, make special offers, etc. Heck it’s automated marketing with zero (at this point) delivery cost.
- once they get an email address, then, get a physical address. MAIL stuff. That’s a novel concept, eh? Dean Jackson (www.thedeanjackson.com) has this technique down. Subscribe and you’ll see his clever way of extracting a regular mailing address from someone that just gives him a regular mail address.
Most businesses think they can survive anything if they’re a nameless, faceless corporation. Heck, the world’s largest company, Wal-Mart, was not faceless at the beginning. Ol’ Man Walton was everywhere. His personality was infused into the culture of the company from Day 1.
RedBox oughta be listening/reading this, too. They can be knocked off. Somehow. It’s coming. They need a face to put with their company. A personality.
An enormous company like Hollywood Video can’t compete with RedBox. RB has no employees at their locations, just service guys to check on the machines. They have no GIANT footprint store with a huge inventory to manage. It’s a different biz. Different biz model.
HV has to do something to reinvent itself. They must, or they die. What do you think they can do?
What’s your big threat(s) in your business that you’re ignoring, hoping it will go away?