I can only assume NCR is forced to do a work around also. With fewer machines, they can buy any movie. Once they get to critical scale, the 28 day window will effect them.

That is why this industry may just sell out to one big player.

And who would the best buyer be? I believe a consortium of Hollywood studios since they can argue there are tons of different distributions points ie Brick and Mortar, Netflix, On Demand, Other Kiosks, Borrowing from friends or library etc.

And then, if the consortium was smart, it would secure long term contracts with their retail partners and then raise rates.

In short, they would get the same economics as when they were getting revenue share with Blockbuster. In addition, they could data mine their customers which is what they always wanted to do.

Think about it, once they know who their customers are, have their credit card numbers, have their email and know their purchasing habits, they could totally grow that into a big business.

Redbox is going to do $1.2 billion in revenue in 2010 by renting out $1/night dvds. Hollywood could raise all prices to $2 and load the machines with Blu Ray discs to justify and not alienate all customers.

Then they could directly sell disks out of each machine.

They could offer coupons for other merchandise.

This could have leverage over Netflix who is one of their biggest customers.

They could stop complaining and get into the business of actually knowing their customers and meeting their needs as opposed to promoting red carpet events to aspirational people.

I have a feeling Blockbuster will replace many of their stores with larger sized kiosks which have a larger selection of movies than regular sized Redboxes. They can call them “Premium” or “Deluxe” kiosks.

BTW, I was NOT able to rent Amelia from Redbox Tuesday 2/2 even though 2/2 was supposed to be the release date. They told me it will be delayed until Saturday. Because I can get it FREE I don’t mind the delay. Plus, I don’t rent that many movies anymore (not enough time).