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Blockbuster Bowing Download Kiosks; Still Mum On Circuit

5/29/2008 10:22:00 AM Eastern

New York — Blockbuster plans to roll out digital download kiosks to most of its stores over the next two to three years.

The announcement was made during the company’s annual shareholder meeting, held here yesterday.

According to a Reuters report, little mention was made of the retailer’s proposed $1.3 billion acquisition of Circuit City. CEO Jim Keyes confirmed during the meeting that his company is performing due diligence on the CE chain, and said that with or without it, Blockbuster is well-positioned to diversify its core DVD rental business by expanding into digital downloads, gaming and CE hardware.

One such effort is the in-store kiosk. A prototype unveiled at the shareholder meeting can download a complete movie in about two minutes, the Associate Press reported, although Blockbuster hopes to reduce the download time to 30 seconds. The units, made by NCR, will initially be compatible with Archos portable media players but will ultimately embrace an open platform that can accept a wide range of devices, Keyes said. Blockbuster will begin testing the kiosks next month in Dallas-area stores, and could roll them out system-wide by 2011.

Keyes added that the company is also developing its own set-top box, which would purportedly support its Web-based Movielink download service.

About 6 percent of Blockbuster stores have been remodeled to highlight gaming and sales of CE devices and DVDs, Keyes said.