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The Boston Globe reports on the continued testing by McDonald’s of the Redbox concept – a vending machine that rents out DVDs for a dollar a day, plus local sales tax. Currently being piloted in some 550 sites around the country, the concept is designed by McDonald’s as something that “could change the video rental industry almost as much as the Golden Arches changed Americans' eating habits,” according to the Globe.

“Redbox charges no late fees,” the Globe reports. “Instead, the customer is charged another dollar every day the movie is out. After 25 days and $25, the renter can keep the disk. To return the movie, people needn't go back to the original location. Redbox disks can be returned at any Redbox in the United States. All of the machines are connected to Redbox headquarters through a broadband digital network, so the company always knows which movies are most popular and which machines need servicing.”

The bulk of the Redbox tests are being conducted in Houston, where there are 181 of the units, and Minneapolis, where there are 145. The company says that most of them are in McDonald’s locations, but there are some in supermarkets (like Stop & Shop in Connecticut) and chain drug stores. To this point, about 2.5 million movies have been rented from Redbox machines.
KC's View:
This simple seems to us like a short-term play, because the technology is moving inevitably toward downloading of movies from the Internet – no discs required.

That doesn’t mean the DVDs are going to become an endangered species. Probably not. But it is important in these cases to keep your eyes on the future…especially because it usually happens faster than you expect.