When the Beast of Disruptive Technology hunts new markets:

Redbox Video and the Rural America

It happened in the middle of the night, the beast technology invaded this small town of Clinton, Ky. Bright Red in color to lure its prey closer to its side, the beast puts its back squarely against the concrete block wall and waits for sunrise.

Redbox video had come to Clinton, Ky. It now rested against the front wall of the local Dollar General Store. The size of a refrigerator, this unit contained some 700 new DVD’s for sell at the cheap price of $1.20 each.

Thus in the span of time less than 12 hours (overnight), the simple act of selecting and renting a video had drastically changed inside the square mile limit of the City of Clinton. Now the good 1200 citizens of this town at the edge of 21st century media and communications technology had a new choice to make in the national Hollywood cultural wars. 

Older videos at the Dollar General were selling for from $5.00 to $8.00. Some 50 feet to the west is Greg’s Super Market, the only traditional grocery store left in town. Greg’s maintains about 300 new and older videos for rent. New ones go for $3.50 with older ones renting for $1.50. 

With Redbox now a fixture within this tight little rural marketplace, real price wars will now make customers start to question their loyalty to a local institution versus a marvel of modern technology with out the ability to say “How are you doing today, Mrs. Jones. Show me picture of the grand children.”

This will be replaced with the small screen on the red box instructing you when its time to insert your credit card and make a selection.  The entire customer experience with Redbox is designed to counter the corporate feeling of the old Blockbuster Video model.

This approach was when Blockbuster charged many hidden fees to customers. Blockbuster was also a harsh customer feeling that they “were being herded into purchasing videos at full retail price.” 

The 2012 video retail marketplace is broken down into three major sections:
(1) Redbox has 19% of market share: (2) Netflex has 36 % of market; and (3) Blockbuster is dominant with 46% of the marketplace.

However, Redbox is growing at rate of 2-4% each year. To meet this threat head on, Blockbuster is rolling out its own kiosks to reach close to 10,000 by 2014.

For what passes as cultural in modern rural America, the battle is on for the
“viewing eyeballs” out in the country of mid-America.  The next five years will see the introduction of several disruptive media technologies that well literally transform life in rural America, into a positive force to help justify the experience of living outside massive urban areas.

This will include: (1) 5 ft. x 8 ft interactive plasma screen TV sets with voice activated computer and internet access.  (2) greater access to MGM and all the major movie studio’s store house of movies for a new hungry home direct and mobile direct viewing (3) and the transformation of the home place media center to become the prime point of living for the family as well as new clothing that is hard wired to allow instant mobile access to home base or the world as any time.

As I get out of car and approach the beast, it makes no sound.

Just before I reach out to awaken it to my needs, I pause, look around me, standing there in the parking lot of the Clinton Dollar General Store and wonder to myself, “My God, do they know what is about to change their lives from this point forward?”

No answer to the question, as I continued my reach for the force that silently waits me. Just as I make physical contact with the beast, I hear in my head the voice of HAL from the scene from 2010 as they were about to disconnect him from the primary system:

“Will I dream?”