Redbox vs. Old Hollywood: who's going to win this time?

Redbox, the bright red kiosks 17,000 strong around the country that rent new and old releases for a mere buck a day, have long been the bain of studio releases. Whereas studios get a portion of rentals from Blockbuster and Netflix, Redbox offers no such deal, forking over only the cost of the rental DVD. As a result, they can keep their rental prices low.

While DVD sales are expected to fall by 850 million this year to $12.9 billion, the portion of that slated by kiosk sales is expected to grow by about $125 million to $415.3 million. Many studios are realizing that while it's a disagreeable model, it's a model they can't ignore, and when sales are this low, they need to take what they can get. (Does this sound familiar at all...hmmm...online movies?) While DVD sales continue to plummet, many studios, including Disney, Lionsgate, and Sony, are biting; quietly cutting deals with Redbox, and hoping to collect a meager, but immediate, profit of a DVD sale.