DVD rental machines to be launched in UK supermarkets

US success has led to a possible threat to 'traditional' British video rental shops

Machines that dispense DVD films for just £1.50 a night are poised to launch in the UK after proving enormously popular in the US.

The automatic kiosks, known as Redboxes, are installed in 18,000 locations across America including at newsagents, supermarkets, restaurants and other retailers.

Coinstar, the company that owns Redbox, is trialling a UK version called DVDXpress at 18 Tesco supermarkets. If this proves successful, Coinstar will then roll out kiosks nationally.

Customers pay by credit or debit card and can rent up to four DVDs at once, returning them to any machine. The kiosks hold 300 recent releases, and stocks are replenished weekly. Films can also be reserved online and collected from a machine later.

To prevent theft, £25 is deducted from a customer's bank account if it has not been returned after 15 days. No membership is required, but a £9.99 monthly subscription offers an unlimited number of DVDs every month.

"The main reason for the success of the kiosks is convenience," said a spokesman for Coinstar. "It fits in with the way people live, with limited time. You could pop out to buy groceries and decide to pick up a DVD, too."

The kiosks are likely to undermine rental outlets like Blockbuster, which requires customers to become members. In the US, it is estimated that Redbox and similar companies will control almost 30 per cent of the rental market by the end of 2010. "People who use the kiosks tend to be casual viewers who don't want to be tied down to subscriptions or membership fees," the spokesman continued. "They want to be able to do it on impulse with the minimum of fuss. The price is low because it's a kiosk and you haven't got the rent and staff costs of a store."

The automated kiosks have been credited with boosting the US DVD rental market at a time when people are reluctant to spend money. In the first half of this year, US spending on DVD and Blu-ray film rentals rose by 8 per cent while sales fell 13 per cent.

However, they have also provoked the anger of Hollywood studios, who argue that $1 per night for a newly-released film cheapens their product and discourages the buying of DVDs.

Warner Home Video, 20th Century Fox Home Entertainment and Universal Studios Home Entertainment want to impose a 30-day delay before new films can be stocked at the kiosks, and have taken their case to the courts. Redbox is suing them as a result.

The kiosks may rival the web-based LoveFilm.com, which sends DVDs to 1.5 million customers' doors in the UK for a modest subscription fee. "The kiosks are a backwards step," said LoveFilm's Simon Morris. "We've got 65,000 films and games and a service which allows you to watch films online. The kiosks won't have the same range."