OAKBROOK TERRACE, IL: Twenty-two percent of Netflix customers will be discontinuing their subscriptions, and out of those dropped subscribers, 57% plan to switch to Redbox, according to new findings.
A survey by Wedbush Securities, a financial securities and investment firm, also reported that if the results reflect consumer behavior, Netflix could lose 21% of its annual revenue run rate, while Redbox's annual revenue run rate could increase by 2%.
“It's a great third-party validation that the power of our brand is really coming through, and when events like these happen, people go to Redbox because of the value, convenience, and fun that Redbox represents,” said Gary Cohen, SVP of marketing and consumer experience at Redbox.
In the days following the Netflix announcement, Redbox saw a significant increase in activity on its social media channels, especially Twitter, said Laura Dihel, senior director of communications at Redbox,
Zeno Group has been supporting Redbox's efforts, and has worked with the firm since January.
Last month, Redbox, which has nearly 31,000 Twitter followers, launched a new handle, @redboxcare, enabling consumers to directly interact with the video-rental company 16 hours a day, seven days a week.
“It has received phenomenal feedback from consumers, many of whom are new to the Redbox brand,” Dihel added.
According to the survey, current and former Netflix customers are more aware of the Redbox brand than Amazon video, making it likely that people who cancel their Netflix plans will choose Redbox as a substitute.
During the first half of 2011, the company also added 3,100 new kiosks in order to connect with more consumers nationwide. Cohen explained that Redbox sometimes adds new retail locations “at the pace of one per hour per day.”
Redbox is continuously engaging with consumers on a social media level, launching Twitter sweepstakes and promotions. The company is making sure to stay well-connected to its fans by keeping an open-dialogue with them and finding out exactly what they want, especially in light of the Netflix criticism.
“It really highlights the importance of having a great consumer-focused brand,” Cohen said.