Redbox plans to begin streaming movies online

Wondering when Redbox, the kiosk-based DVD vending service is going to launch a streaming service to go head-to-head with giant-killer Netflix? Wonder no more.

The company this week said it’s planning to begin rolling out the service next year, hoping to avoid becoming the next Blockbuster, which failed to notice that consumers really didn’t want to have to shop for a DVD to watch, let alone return it, and slowly faded from segment king to roadkill, thanks to services like Netflix an video-on-demand options.

But Redbox isn’t looking to go it alone. The Illinois-based company is looking for a partner--possibly Walmart, which currently is trying to build its own Vudu brand, or Amazon, which also is positioning for a streaming video run--to help it launch a streaming service to supplement (and, let’s be serious here, eventually replace the 28,900 dollar-a-night kiosks scattered throughout the nation’s shopping malls and grocery stores.

"The disc business is still very strong and will continue to be for quite some time,” said CEO Mitch Lowe. “But we need to get into this space to take advantage of the gradual transition to digital.”

Redbox parent, Coinstar Inc., said revenues from DVDs grew 54 percent in the third quarter to $305.5 million.

But, the Los Angeles Times points out, Redbox is seeing growth slow as the market becomes saturated and productive locations for kiosks become more difficult to find. Going to the web may prove to be just as difficult as online streaming movie options proliferate. And, while Redbox has been able to move plenty of titles at $1 a night, it might find that tougher to do online, as movies generally cost upwards of $4 to stream because studios are more able to control prices.

"The way we’re going to deliver this product is going to match the value consumers associate with our brand," Lowe told the Times.

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