According to a study by the Los Angeles Economic Development Corp., the low-cost movie rental kiosks may cost the entertainment industry $1 billion.
This is primarily due to four factors:
- DVD sales cannibalization
- Customers demanding lowing prices from existing rental companies
- The perceived value of movies will be harmed
- Redbox’s sale of discs into the aftermarket conflicts with other retail channels
You can read the study here (pdf).