We are seeing kiosks rolling out to locations at a rate of almost 2 per hour now between Blockbuster Express and Redbox alone. But why are these kiosks all rolling out in an age where we are expecting digital downloads to dominate within such a short time? One analyst put it that we are rolling out hitching posts when cars are starting to roll out.

Maybe it is a difference from a price point. I know that my movie rentals from my Cable provider are at $2.99 compared to the $1 price point that Blockbuster Express has. And AppleTV rentals are $3.99 for new releases in SD and $4.99 in HD. At that price point even I will stop by a kiosk in a nearby store that I’m likely already headed to rather than digital download the movie.

Or is it a different demographic? Are the kiosks seeing a completely different customer base than Netflix? With a Netflix subscription you do get digital streaming of over 12,000 titles currently. But are these the same customers? I can tell you that I had a hard time finding physical comedy movies like Paul Blart: Mall Cop and Madea Goes to Jail in the kiosks. They are highly rented movies. But on Netflix, they don’t even appear in the top 100.

That might indicate that there is a completely different demographic between the Netflix subscriber and the typical Kiosk user. The Netflix subscriber who can pay something like $20/month for a subscription plus $50/mo for high-speed Internet and have a device to play it back on is apparently not the same as the typical kiosk customer. Even though we hear all the reports of the prevalence of high-speed Internet, there are still many households who aren’t setup with a state-of-the-art Home Theater and High-Speed Internet to watch their movies through digital downloads. Even some of the kiosk players like NCR are investing into companies like MOD Systems who can provide digital downloading at the kiosk itself. But will that demographic that isn’t pulling it across the Internet have the appropriate device to plug that Flash Card or Memory Stick into?

Maybe DVD’s won’t be going away anytime soon. With the quick adoption of Blu-ray there will be even more reason to stick with physical media. There is just too much information to push that across the Internet or to store it on a flash drive. I think that the DVD kiosks will be around a long time to continue pushing out new content through a medium where we can still grab a physical item and bring it home. We’ve been doing that for thousands of years. The caveman used to come home with food as a prize to show his tribe, family, or clan. Now we come home with a new movie or game we just rented on the way home instead :-) . Here’s to progress!