Blockbuster gets down-load with in-store digital kiosks

DALLAS —Blockbuster will be the first retailer to move into in-store digital downloads in July when it tests kiosks in a handful of stores.

The chain unveiled a prototype at its annual meeting last month and said the kiosks would allow consumers to download a movie onto a blank disc in 30 seconds. Initial plans will give customers the option of buying a movie or renting it for $3.99. NCR, a company best known for making ATM machines, is manufacturing the kiosks.

In a recent conference call, Blockbuster ceo James Keyes said download kiosks are part the retailer’s strategy to “become the preferred source for digital media entertainment by making it more accessible and convenient for our customers.” The company already has a platform for distribution in the form of MovieLink, a service with more than 9,000 titles. Keyes also said the entertainment business “will be predominantly digital” 10 years from now and wants to make sure Blockbuster is ahead of the curve.

But there’s still a question of how much impact downloads will have on the business, at least in the next few years. Convergence Consulting Group estimates downloads comprised less than 2% of the business last year, but could jump as high as 8% in 2009.

The main obstacle to the business to date has been the amount of time it takes to download a movie on a home computer, an issue the in-store kiosks will address. Music files, on the other hand, are small and take just seconds to download, a key reason for the demise of the CD business.