Finally, Netflix gets a challenger

Netflix (NFLX) has been able to hold off attempts by Blockbuster (BBI) to challenge its CD-through-the-mail model. It has also added an internet streaming video product to fight VOD from cable and new companies that send movies over the internet.

Now, Netflix is being challenged by a low-tech, low-cost alternative for customers. Redbox, which has almost 15,000 rental kiosks from which it offers movies for as little as $1 a day, is beginning to take a large chunk of the CD market.