RedBox, which rents DVDs via red kiosks in various third-party stores across Canada, has announced it is closing up shop in Canada.
In a statement on its website, the company, which set up shop in Canada in 2012 and now has 1,400 kiosks across the country, said it would be pulling the plug.
"We were excited to bring our service here, but unfortunately, demand just didn’t meet our expectations. We will be focusing our attention on our U.S. business, where demand for physical media remains strong," RedBox said.
RedBox had made gains where older companies like BlockBuster, Jumbo Video and Rogers Video failed by focusing on three strategies:
- Keeping prices low, renting DVDs in the $1 to $2 range via their kiosks.
- Keeping their own costs low by piggybacking their kiosks in grocery stores, gas stations and other retailers with a lot of foot traffic.
- Offering newer releases than streaming services like Netflix.
"We give access to new releases movies at a much more affordable price," Redbox CEO Mark Horak told the CBC's Amanda Lang as recently as December. The company was actually adding kiosks in Canada at the time and has processed more than a billion movie rentals across North America in the past 18 months.
RedBox is owned by a larger company called Outerwall Inc., which specializes in automated retail products and services. Outerwall announced in its earnings results that it had taken a $1.5-million charge on its fourth-quarter results as a result of the shutdown. The remaining value of the content library and capitalized install costs are to be amortized over an expected three-month wind-down period.
The kiosks will continue to rent DVD's until Feb. 13, and the last day to return them will be March 5.