• Los Angeles Times, Friday, October 29, 2010 10:49 AM

Ben Fritz reports that Redbox plans to launch a Web-based digital-delivery service next year that will work in conjunction with its $1-per-night movie kiosks. It is in discussion with several possible partners about the expansion.

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

It will be difficult to maintain the $1-per-night price of Redbox' kiosks. The company can acquire physical discs at standard prices and then rent them out for any fee it wishes but movie studios control online access to their content and can charge a high price to distributors for each time the film is viewed. Digital views of new-release films typically now cost consumers between $4 and $6.

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