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)