updated 07:00 pm EST, Mon February 6, 2012
Redbox takes on NCR entertainment division
Redbox finished Monday by acquiring NCR's entertainment division. The $100 million move would see it buy NCR's 35,000 disc kiosks, usually attached to Blockbuster Express, as well as retailer deals and discs themselves. As part of the swap, Redbox's parent company Coinstar will get software and services that will ultimately make a $25 million profit for NCR.
The deal would also help NCR forge a "long-term strategic relationship" with Redbox, according to NCR's CTO, John Bruno. As long as it was approved, the partial buyout would wrap in the summer.
It's not clear what will happen to Blockbuster Express, a service designed partly as a response to Redbox. Blockbuster's current owner Dish might be reluctant to operate the Blockbuster brand under a competitor. As such, it could mark an exit from kiosks for Blockbuster.
For Redbox, the deal would give it a major advantage in dictating movie rentals in the future. The alternative model pioneer has been in a battle with studios to get new rentals at reasonable times. Having many more kiosks could force studios to negotiate more reasonable terms by raising the risk that they'd lose out on a much larger slice of revenue if they back out of any existing deals.