Digiboo will offer kiosk rentals for flash drives

Morgan Freeman and Lori McCreary’s Revelations Entertainment has thrown its financial resources and technical expertise behind Digiboo, a new venture that will allow consumers to rent films by plugging in a small USB 3.0 flash drive into kiosks that will be set up at retail outlets.

Run by CEO Richard Cohen — the former MGM Home Entertainment and Consumer Products president — the L.A.-based Digiboo launches a pilot program in January with Oregon-based Movie Gallery that will see 100 digital movie kiosks operate in Hollywood Video and Movie Gallery retail stores. While Revelations partners Freeman and McCreary are best known for feature film pursuits that include the upcoming Clint Eastwood-directed “Invictus,” they have long experimented in high-tech ventures.

Samuel Edge, the CEO of Digital Revelations, will become Digiboo’s chief technology officer and be involved in day-to-day operations in the new venture. Revelations’ last tech venture was the digital movie-store ClickStar, a joint venture between chipmaker Intel and Revelations that launched at a time when consumers may not have been ready for digital downloading.

McCreary and Edge said things are changing. Downloads are speedy and easily played on home entertainment devices. Their involvement in the venture came from a continuing dialogue with Intel.

“We were invited by Intel a year ago to help put together a technical strategy to distribute digitally, using USB as the medium,” Edge said. “USB 3.0 is remarkable for its portability and the ability to walk to a kiosk and walk away in eight to 15 seconds with a movie in your pocket.”

Digiboo joins Blockbuster on this fledgling battleground in emerging film rental technology, which eliminates DVDs in favor of downloads that can be played on computers, mobile phones, netbooks, televisions and other home devices.

While Blockbuster will reportedly launch its program using SD cards, Digiboo chose USB 3.0 technology, which the company says is already compatible with computers and can be adapted to other devices with an installed base device. An 8 GB unit holds up to four movies, with rental periods expiring at the end of three-day windows and copyright protected by digital rights management technology.

Any new video venture will be compared these days to Redbox and its $1.09 per day DVDs that have shaken up Hollywood.

Digiboo won’t beat that price — Cohen said that the price point will vary during the pilot program but will likely be comparable to the $3.50-$5.50 that Hollywood Video and Movie Gallery charges for rentals. But Digiboo kiosks will offer more than 1,000 movies and TV shows for rental and sale, he said, and the download system eliminates the need for a trip to return a DVD.

“We don’t have any fantasy of knocking Redbox out of the box, because DVDs will remain a successful business for a good long time,” Cohen told Daily Variety. “For people who want a $1 a day rental, we’re not the better alternative, but we believe we offer sufficient benefits, including portability, to achieve a meaningful market share.”

Cohen said he’s in ongoing negotiations with studios to supply product but was confident that the kiosks would be well represented with a wide selection.

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