Tuesday, March 11, 2008

The Economics of Free (next part)

You can probably guess how this works. Come on in, get a free movie for the kids! And hey, while you're here, you might as well (pay) to rent something for the parents too, right? I imagine most people do - in fact, I suspect very, very few come away without paying for something. (Candy? Popcorn?) So I think this is a smart approach. It definitely distinguishes it from other video shops.

As previously mentioned, brick & mortar video shops are under tremendous competitive pressure. I doubt even this approach is going to be enough to keep places like Family Video alive. I can get a kid video and one for the big people at RedBox for a total of $2 - which is probably less than I'd pay for the same combo at Family Video, even though the kid video is free. Still, it's a good try - they're not going down without a fight.

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