Davis Freeberg at Thomas Hawk's Digital Connection talks about the new DVD-rental kiosks located in McDonald's and elsewhere across the country:
Last week, Redbox announced that they have expanded a partnership with Royal Ahold NV and will be offering their DVD Kiosk's in most Stop & Shop and Giant's grocery stores. This is a big development for Redbox because Royal Ahold is currently the 3rd largest grocery retailer in the world. Only Walmart and Carrefour have more grocery locations. While initially the rollout will be focused only on their North East grocery stores, if the program is successful, we could eventually see the DVD Kiosk start to appear throughout Europe.
The program for Redbox is pretty simple. There are no membership fees and all consumers need is a credit card to sign up. You pay $1 for each day that you have the movie. If you don't return the movie, then after 25 days they stop charging you for the rental. You are allowed to return the DVDs at any Redbox location. Currently Redbox has about 1,000 locations nationwide. Most of these are located at McDonald's restaurants, but with this deal and Coinstar's $20 million investment last November, you can expect to see more Redbox locations very shortly.
The stakes are huge and competition is sure to be fierce. In the month of December alone, Redbox was able to rent about 1.1 million DVDs. Last year Blockbuster Video earned an estimated $6 billion in revenue and with the company beginning to aggressively shut down stores, DVD kiosk providers like Redbox, DVD Station and Moviebank USA are in an excellent position to capture customers who prefer the retail experience over online rentals. Traditional retailers like grocery stores and coffee houses will also benefit tremendously from the increase in traffic and the revenue sharing provided from their partnerships. As the retail-plex DVD rental strategy continues to evolve, it is certain to replace the traditional video store. In the same way that the multi-plex destroyed the Rainbow theater, the DVD kiosk will eventually make the retail video store just as irrelevant.
There's a quite a case to be made for humanless physical retail(previous entry on automated convenience stores here). Not to sound cold, but when you eliminate the human employee (people will hate this), but you eliminate such problems as healthcare costs, lawsuits, OSHA, sexual harassment policies, strikes, sickdays etc. etc. Even customer service seems like more of a liability these days, than a plus. If I had to pick a trend going forward, it would be a proliferation of these automatic stores, more kiosks, and more self-service machines. Even the old inefficient monopoly, the US Postal Service, now has self-service machines in many of their locations, and their awesome, not to mention grocery stores and places like Home Depot.
Of course, when human jobs are at stake, humans tend to fight back. No, not Blockbuster workers, who are probably poorly organized, but it happens with professional groups quite a bit. The IAG blog reports that the British Pilots union is protesting the increasing automation on airplanes:
The British Airline Pilots Association (BALPA) recently and officially voiced concern that "Airline pilots increasingly lack 'basic flying skills' and may be unable to cope with an inflight emergency such as sudden mechanical failure." The union warns that pilots are becoming too reliant on automated systems and are not being encouraged or trained to fly manually.
Of course, pilots, who serve mainly as a backup should maintain solid training, but this sounds like any worried threats of a group who is seeing their skill-set diminish in value. Of course, safety is always the argument. It's the same one made by the anesthesiologists, in their opposition to the use of patient monitoring devices, that would reduce the human role in the process. We could find thousands more examples, for sure.
If there's one constant in the economy, it seems to be that interest groups in business, or labor, will try to use government regulation, as much as possible, to maintain their position against competition. Thinking of it this way dispels the notion that regulation is the enemy of business, and that a deregulate environment will open the floodgates of excess profit. It is clearly just the opposite.