7-Eleven and Blockbuster to Duke It Out Over DVD Rental-Box Business

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In June 2007, Jim Keyes took over as chairman and CEO of Dallas-based Blockbuster Inc. -- after having been president and CEO of 7-Eleven Inc., for which he'd worked for years. And now, the circle is complete. Because last summer, Blockbuster announced that it would be installing in its stores DVD-rental "vending kiosks" that more or less resembled automatic teller machines. Didn't make much sense putting a rental machine inside a rental store. Still, Keyes has proven he's game for anything that will boost business.

So too is Keyes's former company, which already is selling video games and DVDs in its convenience stores. (Though, really, I think the selection needs some retooling: This morning, at the 7-Eleven on Marsh and Walnut Hill Lanes, I spied a copy of Bug for $6.99.) And by the end of the month, 7-Eleven spokesperson Margaret Chabris tells Unfair Park today, Dallas, Richardson and Plano stores will have their own DVD-rental ATMs -- which happen to be manufactured by Redbox, with whom Blockbuster's trying to compete.

You've no doubt seen the Redbox -- which, at least, Universal Pictures loathes -- if you've strolled through a Wal-mart, Walgreens or Albertson's. It's pretty simple and kind of genius: The kiosk dispenses a title at the low price of a buck a day, and you can drop off a Wal-mart rental at a Walgreens -- or, by month's end, at a 7-Eleven, which had test-marketed the device in Florida before bringing it to its hometown.

In November 2007, Blockbuster test-marketed its own $1-a-day rental machines in Papa John's and Family Dollar stores in Kentucky. But those never took off, and the company is still expecting to debut its own variation this month. --Robert Wilonsky

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