It's true that Redbox has pulled thousands of kiosks in the past four years. However, Smith says those were all "underperforming" machines. The new hardware is theoretically going to locations where they're more likely to turn a profit... and Redbox is still quite profitable, according to the CEO. That and its new corporate structure lifts some of the expectations. Ever since a private equity company (Apollo Global Management) bought Redbox parent Outerwall in late 2016, Redbox has been a more independent outfit without the pressures it had before. It can invest as much as it needs, and it can focus more on raw cash flow from each kiosk.
The challenge, of course, is making sure that those kiosks offer something you can't get by firing up Netflix or iTunes. Smith notes that Redbox still has coveted rental deals for most of the major movie distributors (Disney is the notable exception, but Redbox can still buy the discs), and paying $1.50 to $2 for a physical rental beats a few dollars through a download-based rental service. The danger may simply be that people are unaware of Redbox. It's planning a renewed marketing push, but it could be hard for Redbox to draw your attention when you're happy to sit on your couch.