Redbox may announce a website for movie rentals in October in an attempt to challenge rival Netflix. At this point, it's still unclear whether this website would offer a DVD-by-mail service, direct downloads, streaming videos, or a combination of these services.
According to a report from Bloomberg, Redbox COO and former Netflix guy Mitch Lowe said his company may try to offer a greater variety of titles through an online service than it is able to offer at its 24,000 retail dispenser kiosks. Each of these kiosks holds only about 200 titles. Netflix offers 100,000 titles by mail and 20,000 older films online.
“The way we look at it is, How can it help us deliver to our customers things we can’t do in our kiosks?” Lowe said. “What role might it play in expanding our selection?”
Although it offers more titles than a Redbox kiosk, Netflix's DVD-by-mail service certainly has a drawback—users must wait multiple days between choosing a film and being able to watch it. For users who desire instant gratification, Netflix also offers an online streaming service with access to a wide variety of titles. In fact, Netflix's online stream service offers 100 times the number of titles in Redbox kiosks. To that end, Netflix seems to have the upper hand in comparison to Redbox. However, Netflix still has a challenge of getting devices that support its streaming service into the living rooms of users who don't care to watch video on their computer. Thus far, Netflix has had success in getting its Watch Instantly streaming service supported on a number of devices. Currently, all major game consoles as well as many set-top boxes, HDTVs, and Blu-ray players support Netflix streaming.
If Redbox decides to offer a streaming service, one solution to help the company get a jump start with the process may be to sign a deal with a company such as Sonic Solutions, which already has deals with many consumer electronics companies. Sonic Solutions has also negotiated Web rights with studios.
It will be interesting to see which route Redbox decides to go.
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