Rental giants tout digital downloads

Blockbuster and Netflix look to the future of rentals

NEW YORK -- Digital downloads were a core theme at investor events held Wednesday by movie rental giants Blockbuster and Netflix.

In his inaugural shareholder meeting at the helm, Blockbuster chairman and CEO James Keyes said the firm will launch in the coming month a test of in-store kiosks that will allow consumers to download movies onto portable devices within two minutes.

Keyes said Blockbuster is in talks with studios about content deals and likely will have limited movies on offer for its kiosk pilot.

He acknowledged that the kiosk test likely is well ahead of broad consumer demand for such services and should therefore only be seen as one additional distribution channel for Blockbuster as it tries to offer content whenever consumers want it and in whatever form they want. The company also is working on offering downloads via set-top boxes and IPTV.

The download time of the kiosk, designed in its pilot version by NCR (which also builds airline ticketing kiosks), is targeted to get down to 30 seconds over time as Blockbuster is striving for an ATM-like experience, Keyes said. As he sees it, kiosk deployers would bear much of the cost and share in the revenue with studios and Blockbuster.

Meanwhile, at Netflix's investor day in San Francisco, CEO Reed Hastings also touted investments in the firm's online service, arguing the DVD-by-mail service will peak in as soon as five years.

Funding Netflix's streaming initiatives while still growing earnings and subscribers are his "key challenge," Hastings said. Once the company firms up its streaming capabilities, "we can attract well beyond 20 million subscribers worldwide," he said.
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