Blockbuster Starts New Grocery-Store Kiosks -- And May Save Itself In The Process

(MoneyWatch)  Blockbuster is rolling out grocery-store kiosks, a move that could take out upstart Redbox and re-establish its foothold in middle America. The relatively old-fashioned DVD push is infinitely smarter than pushing into the crowded digital space or continuing its losing mail-order battle against Netflix.

Local movie boxes are still a wide open market. The indie innovator Redbox is far from penetrating every U.S. market. In fact, Redbox is having a hard time getting the actual movies. According to the Los Angeles Times, Fox, Warner and Universal won't supply Redbox with movies. (Fans of Paramount movies can sleep soundly.) With a quarter century in the business, obviously Blockbuster wouldn't have this issue at all. Blockbuster has closed thousands of stores this year, and the kiosk could finally bring the company to the new millennium.

Furthermore, Blockbuster shouldn't go any further into digital downloads, another popular area among the movie deliverers. Blockbuster already does a download-to-PC or TiVo rental service, but it should remain a light addition as opposed to a primary source for Blockbuster customers. Best Buy and other companies are already foolishly jumping into the packed digital movie arena and diluting their brands.

Finally, Blockbuster is getting slammed on the mail-to-home movie front. As Reuters mentioned recently, Blockbuster just posted a larger-than-expected quarterly loss -- while its wily competitor Netflix thrives. Blockbuster got into the delivery market too late. Time to pack it up and move to greener pastures, such as grocery-store kiosks.

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