There’s been more news this week on RedBox and online distribution, following the Disney/Marvel acquisition announcement on Monday.

Video Business summed up the latest on RedBox yesterday.  The brief version:

1. Indie rental stores are launching a campaign to persuade people to avoid RedBox because it’s “putting the entire entertainment industry at risk.”

2. SNL Kagan has released a report that says that the video-on-demand business model can’t compete against RedBox’s $1 rentals.  (The reason?  The studios get 70% of a $3.99 video-on-demand rental, leaving the provider about $1.20 on each transaction… if you cut the VoD price to $1, the provider gets just 30 cents. — too little to cover costs.)

Meanwhile, the Wall Street Journal (subscription required) reported that YouTube is in negotiations with some studios to start offering streamed movie rentals (aka video-on-demand).  The $3.99 rumored price suggests that this will follow the usual 70-30 split between the studio and the provider.

I think the lines are being drawn in the sand here.  On the one hand, we’re seeing some providers (e.g. YouTube) embrace the revenue-sharing model that exists in the traditional distribution channels.  On the other, RedBox is holding out for a new distribution model that’s less lucrative for the studios (and more profitable for them).

The company to watch right now, in my opinion, is NetFlix.  They’re also hoping to build a business that doesn’t involve revenue-sharing.  Their challenge, I think, is that the financial markets would reward them handsomely in the short term if they just cut a revenue-sharing deal with the studios.  The temptation to do so will be huge, but I suspect they’ll wait to see how the RedBox lawsuits pan out before they move one way or the other.