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After a banner year of ever-increasing DVD Rentals, Redbox is looking beyond physical media and into digital distribution, according to one analyst. D.A. Davidson & Co analyst John Kraft says that Rebox will not “sit on the sidelines” when it comes to digital delivery, and is exploring distribution via SD cards, USB drives and other devices. Says Kraft:

“We believe there is, and will be, a broad base of customers for DVDs . . . Nevertheless . . .  we believe the company is testing options, including a partnership with another digital vendor.”

Pali Capital analyst Richard Greenfield says that because the First-Sale Doctrine doesn’t apply to digital media, Redbox will have to deal directly with studios to obtain such content—a potential roadblock. Says Greenfield:

“We believe a direct digital relationship with at least three studios (Fox/Universal/Warner) will be impossible until Redbox agrees to a window for its DVD rental business . . . While Redbox can survive with low inventory of DVDs via workarounds, in a digital world low-inventory goes to ‘no inventory’.”

If Kraft’s statements are accurate, Redbox would not be the first kiosk operator to dabble in digital distribution. NCR Corp. has looked into distribution via SD cards at its Blockbuster Express kiosks in recent months.

Would such a move make sense for Redbox, Insiders? Would you be interested in adding digital delivery to your Redbox experience? Leave your opinion in the comments.

(via Home Media Magazine)

9 Responses to “Analyst: Redbox Looking at Digital Distribution”

  1. Member [Join Now]
    MovieWatcherSupreme [moviewatchersupreme]

    Digital Distribution, my first thought is: COOL!
    DVD market will be strong for quite some time, but the idea of digital distribution is exciting. Good thing for Redbox to look into in my opinion for sure. Although, this has the potential to make bootlegging considerably easier.
    But overall, with more and more TV’s and Blu-Ray players having the ability to play media from USB and other drives, this is presenting itself as a awesome idea. I can see myself receiving a red flash drive from a Redbox in the future.

  2. Visitor [Join Now]
    Seth [visitor]

    “Leave your opinion in the comments”.


  3. Member [Join Now]

    This sounds very interesting and will definately be looking forward to this feature. The only drawback I see is that it doesn’t quite have the “plug-and-play” kind of access that DVDs offer.

  4. Visitor [Join Now]
    Yakura [visitor]

    Would be nice …if evey DVD player supported USB movie playing …its just a stop gap to streaming. I dont see any value-add over DVD disk at this point… we need Pandora-style mivie watcing with every TV/DVD player having wi-fi

  5. Member [Join Now]

    Actually this would be a really cool idea for Netbook and Notebook users to watch DVD’s on the go. Netbooks don’t have a built in DVD drive.

  6. Visitor [Join Now]
    Michael [visitor]

    I think this is a great idea. Infact, I’d like to see disks gone completely. I’m tired of getting to a Redbox on a whim, only to find that the movie I want is all checked out.

  7. Visitor [Join Now]
    bmeeks24 [visitor]

    Would be cool to plug into my xbox USB or Wii (if that were possible) and just watch something. Could you download from the kiosk? Like stick your 8GB drive in and “fill er up” with a couple of movies before a trip or on the way home from work?

  8. Visitor [Join Now]
    Benoneya [visitor]

    Digital smidgetal. Why don’t they set up a streaming service? Why should we have to deal with physical media at all? If they can beat Apple’s prices and Netflix, they’ll be successful. Set up a website, and rent me a movie. Simple.

    With the numbers of people getting online and going to set top boxes to stream to the TV I’d think that would be a no brainer.