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Redbox Expected to Announce ‘Major’ Digital Partner Thursday

27 Oct, 2010 By: Erik Gruenwedel

Redbox is expected to announce a significant third-party joint venture for a streaming service when parent Coinstar Inc. reports third-quarter results Oct. 28, an analyst said.

Citing changes to its corporate structure disclosed in an Oct. 26 regulatory filing, Eric Wold, analyst with Merriman Curhan Ford in New York, said he expects Coinstar will unveil a deal with either Wal-Mart or Amazon to distribute disc and streaming on a monthly subscription basis.

Wal=Mart, which owns and operates Vudu movie download service, represents 20% of Redbox’s retail footprint. Amazon, which sells physical media and transactional video-on-demand via Amazon VOD, has said it is working on a streaming initiative.

It is believed Coinstar is entering into such an agreement so Redbox can jumpstart a digital service and close the gap with Netflix, which last week disclosed that its 17 million subscribers stream more content than rent physical discs.

“We continue to believe the most likely candidates for this Thursday’s announcement are Wal-Mart and Amazon,” Wold wrote in a note. “In our opinion, changes such as these in the 8-K [filing] would be necessary before any major partnerships or ventures could be formed.”

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