In our childhood, renting DVDs was a very common thing among us. DVDs of new music videos, new movies, and also games were available in the local market. But, with time, the demand for DVDs got lost somewhere in the traffic on the internet. Today, internet service is available in most of the rural corners of the world resulting in the disappearance of DVDs. Today’s population will always choose Netflix over buying or renting DVDs for their entertainment. Moreover, we also have torrent to make our life easier. Amongst all these websites fighting to stay in demand, Gregg Kaplan still thinks the market for DVDs is not yet dead. Gregg Kaplan is the founder of the famous DVD company, Redbox. Redbox is a famous American company that provides mainly DVDs, Blu-ray rentals, etc.
Gregg Kaplan
Gregg went to the University of Michigan and acquired his bachelor’s degree in Philosophy. Later, he went to Harvard Business School to acquire his MBA. Before pursuing his MBA, Gregg started working as an investment banker in New York City. He also worked at Furman Selz for three years. And, after completing his MBA, he started working for Streamline.com. He worked in this company until 1999 as the Director of Interactive Marketing.
In 1999, Gregg joined Divine interVentures and continued for a couple of years. In 2001, he started working at McDonald’s Corporation as a Strategy and Development Executive. From here the journey of founding Redbox took place. He built the entire company from scratch and now it earns annual revenue in billions of dollars.
He is one of the most influential businessmen in Chicago who came in the list of Crain’s Chicago Business’s 40 under 40. Gregg’s first wife passed away due to breast cancer. So, he along with Avner, his second wife launched a website to educate women about breast and ovarian cancer.
Founding Story of Redbox
The story dates back to 2001 when Gregg started working for McDonald’s Corporation. During this time, McDonald used kiosks for selling a variety of things but they stopped using kiosks since 2003. Though Gregg worked for the company, he wanted to build a new business using these kiosks. And, he decided to use them for the DVD rental business.
Gregg named the company Redbox Automated Retail LLC. The price for the DVDs rentals went up and down for a few days and finally settled at $1 per day. The company’s most unique feature was the advantage of returning the DVDs at any Redbox kiosks. The other competitors of Redbox then didn’t have this feature.
The Growth
From the beginning, Redbox started renting DVDs of both movies and games. The company was established in 2002 and in the same year Gregg opened eleven kiosks in the Washington Metropolitan Area. Initially, the kiosks also sold grocery items but the sale of DVDs only seemed to increase rapidly through the years.
In early 2000, news came up about the failed attempts of Redbox to sell half of the company to Blockbuster and Netflix. But, in 2005, finally, Coinstar acquired 47% of the company for $32 million. The company was still under McDonald Corporation when Coinstar offered around $176 million to buy the rest of it.
The Success
After Blockbuster turned down the offer to buy a part of Redbox, in 2007, Redbox outruns the company in the American market. In 2008, the company hit 100 million rentals and crossed a billion within September 2010. The success of Redbox was unbound and finally, it was giving competition to the biggest companies in the media industry.
In 2010, Redbox started renting Blu-Ray around the whole nation. And, this year it also started renting video games to new places like Texas, Orlando, Florida, Oregon, etc. 2012 was a very precious year for Redbox as it acquired its former competitor, Blockbuster Express in this year for $100 million.
Gregg Kaplan eventually stepped down from his position and Anne Saunders became the new president. By 2013, the number of kiosks locations increased to 40,000. Gregg, in an interview, said that the demand for video game DVDs mostly is not going to decrease any sooner. The most important reason is it is economical. But, in 2019, unfortunately, the company announced that it would no longer rent video games.
Annasha Dey is an NIT student, who apart from studying engineering is also a content writer. She has a great interest in photography, writing, reading novels, and travelling as well. She is a foodie who loves socializing and hanging out with her friends. She is also a trained Kathak dancer and a big fashion enthusiast. Dey also loves watching TV series, which includes F.R.I.E.N.D.S. and Big Bang Theory. To be a better writer she prefers to read more