“Is That Like a Licensing Fee?”
Getting breakfast at McDonald’s this morning, my 8 year-old son asked me how much a Redbox was.
If you didn’t know, McDonald’s — and virtually every other retail location — now sport the ubiquitous red vending machines that dispense DVD’s, not soft drinks.
Thinking he meant a DVD rental, I said “$1 a night.”
To which he answered irritatedly, “No, I mean the Redbox.”
It turns out he really did mean the actual Redbox.
I told him I’d guess $10,000 per box, and that each retail outlet probably got a percentage of the sales as commission (the son of a Realtor, he already knows what “commission” is).
I think I read once somewhere that the Redbox actually increases customer traffic at the retail locations and so it could be that they offer the space for free or may even pay Redbox for the rights?????
Nice business model!