Taking a cue from popular DVD rental service Red Box, Blockbuster Inc. and NCR Corporation will be placing Blockbuster-branded, state-of-the-art DVD vending kiosks in a pilot program that could be the first step of a national rollout of thousands of units.

The initial deployment of 50 Blockbuster-branded kiosks should begin in the third quarter of 2008 with all units expected to be installed by year-end. The pilot vending kiosks will initially offer DVD rentals, but the machines will allow for future applications, including digital downloads and other services, such as sales of DVDs and video games.The companies have not announced the markets or site locations for the first units.

Earlier this year, Blockbuster and NCR announced an agreement to test digital movie downloading kiosks in select Blockbuster locations. The first of those units is expected to be installed in two Dallas stores this summer.

Analysts are projecting DVD vending kiosks could grow by more than 60 percent over the next three years, increasing from 9,300 units at the endof 2007 to more than 22,400 by the end of 2010. Additionally, consumer spending on movies from vending machines during that same period is expected to grow from $197 million to more than $760 million.