Final answer:
Despite the rise of streaming services, many consumers in 2012 still preferred the convenience and physical nature of DVDs from Redbox kiosks, leading to an overestimation of the shift from DVD rentals to online streaming.
Step-by-step explanation:
The question explores why the estimate of customers moving away from DVD rentals to online streaming was not as significant as anticipated. Despite the introduction of streaming services like Netflix, Hulu, and Amazon Prime, Redbox kiosks remained popular due to their convenience. Jaime Weinman noted in Maclean's that for many, a five-minute drive to a Redbox kiosk was preferable to streaming online. In 2012, proximity and the tangible nature of DVDs were significant factors for consumers, reflecting a hesitation to fully embrace digital streaming over physical media. The presence of close substitutes like Redbox meant that the demand for physical DVD rentals remained higher than Netflix management had estimated, revealing a misjudgment of the market's elasticity of demand and consumer preferences. According to Jaime Weinman's report in Maclean's, Redbox kiosks were conveniently located within a five-minute drive for 68 percent of Americans, which made physical DVD rentals more appealing than streaming video for many consumers.