They don’t look terribly revolutionary, like big coffee vending machines dumped rudely on pavements, in supermarkets and even in restaurants, but they are said to be transforming home entertainment in the United States.

Self-service DVD rental kiosks, charging just a buck a film, have made everybody, from film studios and DVD retailers to recession-weary consumers, sit up and take notice.

Led by Redbox, which operates DVD rental kiosks in 17,000 locations, vending companies boast 19 per cent of the rental market. Redbox’s automated kiosks hold about 700 DVDs, including up to 200 new releases. Consumers make their selection on a touch screen and pay by credit or debit card.

Postal services, led by the hugely successful Netflix, have 36 per cent of the market and traditional stores, such as Blockbuster, 45 per cent.

However, NPD Group, a market research company, estimates that vending will grow to a 30 per cent share by the end of next year. “Consumers are obviously responding positively to the perceived value of $1-per-day rentals,” Russ Crupnick, of NPD, said.

Coinstar, Redbox’s parent company, produced revenue of $314 million in the last quarter, up 43 per cent from the $220 million earned in the same period a year earlier. Net earnings more than doubled to $7 million.

Moreover, Redbox’s rise comes as film studios are reeling from falling DVD sales. Screen Digest says that DVD sales fell from $16.6 billion in 2004 to $14.5 billion last year. By 2013, it forecasts $12.8 billion.

Some studios have cut deals with Redbox, but others, worried that the kiosks are contributing to the slump in sales, are unhappy. Warner Home Video, Universal Studios Home Entertainment and 20th Century Fox Home Entertainment are refusing to sell DVDs to Redbox until at least 28 days after they arrive in stores.

Redbox is suing them on antitrust grounds. Mitch Lowe, the company’s president, said recently that the new studio policies hurt consumers.

Blockbuster, meanwhile, has started to introduce rental kiosks, with plans for 7,000 in 2010.

And the machines are crossing the Atlantic: Coinstar is testing its DVDXpress kiosk at 18 Tesco stores in the UK; and Movie Booth, a private company, is trying out 40 kiosks across the country and in Ireland, with rentals at £1.50 to £2 a night. Not quite a buck a film, but a challenge to the status quo, nonetheless.

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