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Redbox Looking To Expand To Online Streaming In 2011

by Sean P. Aune | October 30, 2010October 30, 2010 8:00 am PDT

With 28,900 kiosks to its name, Redbox, a division of Coinstar, is finding it harder and harder to find locations for its rental machines. The red beacons of home entertainment have become ubiquitous at pharmacies, grocery stores, Walmarts and more locations, so the company is going to have to look at other avenues for revenues.  Que turning to the Internet like just about every other company out there these days.

redbox kioskIn Coinstar’s financial report for the quarter ending Sept. 30th, the company reported that DVD revenue grew 54 percent over the previous year to $305.5 million, and operating income grew 149 percent to $29.7 million. While all of this is great, the company is beginning to hit a wall as to where it can put the kiosks, so initial talks have begun with movie studios over the possibility of support for a streaming video service from the company.

The big question will be pricing as Redbox has built its reputation on $1 DVD rentals, but online that is going to be a lot more difficult. According to an anonymous studio source that spoke with The Los Angeles Times and said that the negotiations thus far had moved towards a subscription model similar to the one Netflix offers and that movies would average out to around $1 each.

Considering how early in the process this is, there’s no word on what third party media devices would possibly support a Redbox subscription service, and there’s also no word on how many recent titles it would carry as opposed to back catalog productions.  The company has built its reputation on the newer titles, and if those didn’t carry over to the online service, it would have a long road a head of it to try to catch up with Netflix’s constantly growing subscriber base.

There is nothing wrong with a little competition, but unless a company, not just Redbox, doesn’t do something new and exciting with streaming services, it’s hard to believe anyone will catch up to Netflix.

What say you?  Will Redbox be able to catch up to Netflix?


Sean P. Aune

Sean P. Aune has been a professional technology blogger since July 2007, but his love of tech dates back to at least 1976 when his parents bought...

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