Took notice of CoinStar, owner of Redbox movie rental kiosks, last autumn, around 34 or so, since then it's gotten run up, then run down.  The perception now, with appreciation of Netflix's streaming hegemony growing, is that Redbox is the present, but not the future.

I will admit, Redbox is a little less tasty than NFLX because of the streaming issue.  But I am convinced that for a segment of the population, renting through Redbox will continue to be appealing.  And I would go further and state that a lot of people who would be customers are only now turning on to it.

So why would someone want to get a movie from a kiosk when they could download it from their cable box?  There are several, let's start with price.

Video on demand from cable and sat providers targets a very different price point, around $4 or $5, whereas Redbox is $1 per night.  (Granted, you might rent a movie then not watch it that night, but customers see the $1 and that's what they pay attention to.)

Netflix streaming is great if you're a movie buff, but for the most part, big studio movies are not part of their streaming options.  So a lot of people look at Netflix and say 'too expensive, I don't want another monthly fee' and for those people, Redbox will be attractive.

There are also people whose internet connections are slow or non-existent.  I know it seems hard to believe!  But those people do exist.

Also, and this also may seem hard to believe, but I think a lot of people like the physical act of choosing a movie.  Which explains why Blockbuster is still alive (nominally).  As it fades into oblivion the people who like physically picking out a movie will take their business to Redbox.

A lesson from Netflix itself might be appropriate to keep in mind.  Only a year ago people were criticizing Netflix as a bad investment because of the mail-oriented bias to their business, and people thought the transition to everyone doing VOD would be extremely rapid.  Well that transition is happening, but not overnight.  In the meantime, Coinstar's got a pretty nice little business model that a lot of people on Main Street like.