Five potential mates for Redbox streaming play... the winner likely is Amazon

Whether Redbox, the king of kiosk-based DVD rentals eventually will jump into the video streaming business isn’t the question, CEO Paul Davis last week during the company’s conference call said the firm will begin doing that in 2011. The big question is who best fits as a partner, since Coinstar expressed little desire in pouring money into its own digital offering.

The company has said little to point directly at any particular company, saying it was talking with several, but it did share a shopping list of traits for its ideal mate, among them: a robust consumer base, solid technology, a deep library of titles and a strong brand. Wedbush analyst Michael Pachter came up with his own list, naming five companies he thinks would flesh out a Redbox streaming play, among them:

  • Netflix, a natural fit with top-notch technology and a brand that says it all. But, he says, Netflix may have no interest in working with Redbox, because, bottom line, Redbox can’t bring Netflix anything it doesn’t already have except a way to reduce its postage costs;
  • Apple, another excellent brand with great technology, but with little upside for the computer company and a reputation of “preferring to go it alone.” And, Pachter said, a deal with apple wouldn’t jive with Apple’s core business: selling hardware;
  • Vudu, acquired by Walmart earlier this year, would be a no brainer, Pachter said, as the two already have an alliance with Redbox kiosks in Walmart stores. But the retailer’s catalog may not be deep enough to sate the appetite of Redbox, which is looking for a deep content offering;
  • Sonic Solution, which already is working with Sears and Best Buy on streaming video offerings, would be a “non-event” with little upside for Coinstar; its brand and catalog both are pretty thin;
  • Pachter said Amazon may be the most natural fit for Coinstar and Redbox, and beneficial for Amazon, which is still struggling to find its place in the streaming video pecking order.

For more:
- see this The Street article

Related artcles:
Redbox plans to begin streaming movies online
Redbox looks to tackle Netflix, weighs streaming video play