Netflix Vs. Redbox: DVD Rental Battle Royal

In the right corner, we have DVD rental kiosk, Redbox, and, in the left corner, we have Netflix (NFLX). Sitting up in the nose-bleed section we have BlockBuster (BBI).

Already up 35% and as high as 63% for 2009, everybody is looking to see who will give Netflix a run for their money. The latest chump… I mean competitor seems to be the DVD rental kiosk system, Redbox.

If you are unfamiliar with the company, let me fill you in…

Redbox has kiosks located at over 15,000 locations where customers can come and rent DVD’s for $1 a day. They are usually located at grocery stores. Owned by the same company that brings you Coinstar (CSTR), the DVD renting kiosk has quickly become a growing trend.

The advantage for Redbox is their price point. The cheapest fee for Netflix is $5 a month, which will only get you 2 DVDs per month. With Redbox, you simply pay $1 per night. Obviously, in a recessionary economy price will catch the attention of most consumers.

I’m not sold on Redbox though. While Redbox tracks rentals to predict the right mix of titles and the right number of copies for each location, the first notable con is the that it is a kiosk. That makes quantity and spread of titles drastically less than Netflix.

At this current time, there are no streaming versions available with Redbox. Netflix has partnerships with Xbox, Samsung, TIVO (TIVO) and many others that allow you to stream Netflix content through various platforms. Netflix is a true “don’t leave your house” rental system.

While Redbox has the tools in place to perhaps one day give Netflix a true run for their money, the fact remains that nobody can really touch the DVD rental system as Netflix can. Especially in this era, very rarely do we come this close to a monopoly, so, for now, the Heavyweight belt is safe for another day.