I just wanted to see some of your thoughts on starting a video rental store. I know most people think a regular video store may be a bad idea. But, I am thinking about being a little creative.
Also, remember that now Netflix, and Redbox must wait 28 days before renting new releases. So I would have new releases 28 days before Redbox or Netflix.
Also, let me give you a little background. I am in a small town, and the movie gallery closed down due to the whole company going under. Because, they had very high debt/income ratio, high overhead, and poor management.
So that leaves a void in my town. The way I am thinking about running my store would be to offer regular rentals, but also to offer a /month 1 at a time unlimited rentals package. However, there would be a 2 week restriction on new releases. That would allows my customers to still get movies 2 weeks before Redbox or Netflix. This would allow me to pay for the movies and turn a little profit in the first few weeks. If unlimited members wanted to rent a new release they would get a 50% discount off the regular price.
I also will have a very low overhead.
Just wanted to get some feedback on the idea, and see what you think.
I would also like some figures from different areas, and movie rental stores. So if anyone has worked at a movie store, and has some useful info, or figures like daily rentals, sales volumes, number of members, that would be great. Also, if you have that info, be sure to tell me how big your town is. Thank you.
Yes, I have researched and more restrictions are coming for those companies. I have spoken to multiple distributors.
The studios placed additional restrictions on Redbox, and Netflix because they were hurting sales and revenues. In exchange for discounts on dvds they must wait 28 days, after a dvds release date to rent the dvd to their customers. Brick and Mortar Video Rental Stores, and Retails like Walmart will sell/rent dvds 28 days before Redbox, and Netflix.
Kimberly at LoftisConsulting.com says
Unfortunately, I do not think it is a good idea and here is why.
1. Too many competitors. Even though there are no local brick and mortar video rental stores, your customers can still buy movies from plenty of places as well as rent online and through Redbox.
2. Potential customer base too small. The target customer you going after is too small. You are betting your business that most renters will not want to wait for a cheaper rental alternative. People who have to rent a video when it first comes out is only a small portion of the video rental market. Most renters do not even know what is out until they browse the Redbox screen or video store.
3. Price point too high. Your competitors have very low overhead costs due to the lack of a physical store location and thus lower prices that your $20/month unlimited package.
4. Distribution is limited. Your competitors have various distribution channels today and are opening new ones in the future such as online video streaming and partnerships with Tivo and cable companies. You only have one location.
Hope this helps.
Render Innovations says
Just a question, Have you researched if receiving these dvds before a certain time is even possible? Movies do not come out on rental till a certain date, why is redbox different?
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