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Things aren’t going well for video news rental goliath Blockbuster. Netflix’s rental service arguably offers a superior consumer experience. Redbox DVD kiosks are cheap, convenient, and fast. And online streaming from Netflix, Hulu, and other companies threatens to destroy a huge chunk of the DVD industry at a whole. In September we learned that they might be closing almost 1,000 of their remaining 4,400 stores.

Into the breach comes a new scheme to allow movie rentals through kiosks via SD cards. But does the plan make any business sense?

According to Fast Company, customers can take an SD card to these kiosks (Or a card would be provided for you. It’s not 100% clear) and then load it up with a movie, after which it can be played on a TV or a SD-reader equipped mobile device. The new scheme will actually have some benefits over your standard Redbox rental: Specifically, you won’t need to return the movie, since there will be DRM software loaded onto the card that will prevent you from playing the movie after a certain date. SD cards are also harder to damage than DVDs.

Bafflingly, the article posits that “Blockbuster is hoping that the better quality video contained on their SD cards will win streaming video customers back…” It sounds plausible to me that this is Blockbuster’s reasoning, but if so, it further demonstrates their inability to adapt to a rapidly changing environment. People don’t stream movies because they’re looking for the highest quality; they do it for the convenience above all else. These kiosks seem to be anything but.

I can see these kiosks being popular at airports, where people with netbooks or Macbook Pros might be able to stick an SD card into their laptops and play a film on the flight. But I can’t see this beating Redbox (who wants an SD card instead of a DVD?) and I definitely can’t see it supplanting streaming as a growing and preferred content delivery method of choice.

Discuss: What do you guys think? Would you ever rent a movie on an SD card?

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