Best Buy offering 99 cent video on demand movie rentals

Posted 17 August 2010 18:45 CEST by Randomus

Electronics retailer Best Buy plans to offer 99-cent digital movie rentals through CinemaNow, as the company looks to pack into the increasingly crowded home entertainment market.

Best Buy, still known for selling electronics and other home appliances and devices to consumers, has increasingly branched out to new revenue streams.  Analysts expect higher interest from brick & mortar retailers looking to get into digital media distribution — with products ranging from online music and video to e-books.

“This is the most notable focus that Best Buy has made on CinemaNow to date,” said Ralph Schackart, in a recent research note.  “We expect greater CinemaNow focus and rollout to continue.”

Best Buy first announced the digital movie service last November, and waited until May 2010 before confirming a planned movie service launch.  Best Buy acquired CinemaNow from Sonic Solutions, so a movie service isn’t surprising.

Redbox and other movie rental kiosks typically offer between $1 and $1.50 for daily DVD rentals, while CinemaNow provides 48-hour browsing windows for rented digital content.  CinemaNow customers currently pay $2.99 to $3.99 for all rented movies.  It’s not necessarily the early death of movie rental kiosks — especially since most consumers likely don’t realize Best Buy has CinemaNow — but it’s a clear sign towards an increased push in digital content distribution.

The company is now training Best Buy employees to be familiar with CinemaNow, while the service is expected to be included on even more Internet-enabled HDTVs, Blu-ray players, and other electronics.  Assuming Best Buy trains its employees accordingly — which may or may not happen — consumers should be aware they may have yet another service salesman are going to try to include/promote Best Buy VOD services when making a sale.

With the low-cost and convenience of Redbox and other kiosk rental services, I think that digital movie services will need to try to reach near $1 per rental in order to effectively compete. It’s good to see that Best Buy is leading the charge, even if it might only be for a limited time promotion or with limited titles.

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