DVD rental specialist diversifies, bringing ticketing to where consumers spend their time and money: the local store.
Redbox, with its ubiquitous DVD rental kiosks, is entering the ticketing game, beginning in Philadelphia with tickets available at kiosks and online. Los Angeles is next in early 2013, and Redbox president Anne Saunders says she sees no reason why the program can't eventually be rolled out nationally. With 38,500 kiosks nationwide, if the industry opts in to a significant level, Redbox could conceivably move the needle in both ticket sales and general awareness of events.
Retail outlets have a long history in the ticketing business. In the pre-Internet, pre-call center days, record stores and the venue box office were the primary outlets for ticket sales. Ticketmaster partnered with Walmart starting in 2010, and last summer announced a deal for Walmart to sell tickets through kiosks at hundreds of the retailer's locations around the country. Before its merger with Ticketmaster, when it rolled out its own, now-defunct ticketing solution, Live Nation was partnered with Blockbuster's brick-and-mortar stores to sell tickets.
But, with its highly visible DVD kiosks in front of a wide range of retail sites nationwide, Redbox is a video rental model that has been embraced by the public to the point that Redbox is now averaging 59 million transactions per month. Kiosks can be found where consumers live, sitting outside McDonald's restaurants, at grocery and convenience stores, at select Walgreens locations and, yes, select Walmart locations. Ticketing could also serve to help Redbox diversify as it copes with mounting pressure from Hollywood studios that have never been fans of the Redbox business model.
Redbox says it has rented 2 billion videos since opening its first automated rental kiosk in 2002, and "with so many people coming to us to find out how to spend a few hours being entertained, we thought it was completely natural to extend and offer people the same Redbox model -- affordable, fun, convenient access -- to live events," says Saunders, who believes Redbox could help address an industry-wide issue of unsold inventory, much of it due to a lack of awareness of events by consumers.
"We know from talking with our customers that they go to a lot of live events, and for many of us it's not always easy to find out what's going on and how to get the tickets," Saunders says.
Part of Redbox's appeal in the video rental business is its simplicity, which will extend to ticketing. Redbox tickets will be sold at face value or below, with a $1 fee per ticket that serves as Redbox's piece of the pie.
Redbox will roll out ticketing to all 650 kiosks in the market by mid-October, and they can also be purchased online. Consumers will have the option to print their tickets at home or, in some cases, pick them up at the venue. And Redbox tickets aren't limited to music. In Philly, consumers can now purchase tickets to Carrie Underwood at the Wells Fargo Center, NASCAR events at the Pocono Raceway, the Philadelphia Film Festival and Villanova Athletics sporting events.
"We're open to everybody, whoever is controlling the inventory," says Mark Achler, senior VP of new business, innovation and strategy for Redbox.
Achler says the company has had conversations with a variety of ticketing companies, including Ticketmaster.
New Era Tickets, a division of Philadelphia-based venue management firm Global Spectrum, and Sparkart are key launch partners of Redbox's ticketing business.
Saunders says that no significant changes need to be made to the kiosks to add ticketing to the offerings. "The interface was relatively easily adapted, and Mark and [his] team did a great job doing a lot of user testing, so they got the whole process of looking for an event and making a purchase down to about the same amount of time that it takes to rent a DVD," she says.
This seems to truly target the impulse buyer, with kiosk generally offering "best available" tickets, rather than seat maps and specific locations. "If you want to get particular, you can do that online," Saunders says. "We're not taking ownership of inventory, so, by and large, [ticketing] was not something that required us to make a lot of changes to our core business."
The marketing potential of Redbox kiosk ticketing extends beyond just creating awareness. Similarly to tickets being offered at Groupon and other discounting operations, Redbox could conceivably come in if a show needs help with sales and offer some tickets at below the price of the initial on-sale.