Toys ‘R’ Us Continues Digital Push With Movie Streaming

Toys “R” Us Inc. (TOYS), the world’s largest toy chain, announced a video-distribution service less than a month after unveiling its entry into the surging tablet market with a device geared for children.

More than 4,000 movies and television shows curated for families will be available via the Web beginning tomorrow, the Wayne, New Jersey-based company said in an e-mailed statement. The site, www.ToysrusMovies.com, features such titles as Walt Disney Co.’s “Marvel’s The Avengers.”

Users buy or rent content and watch it by streaming or downloading it to a computer. The service, powered by Rovi Corp. (ROVI), will expand to more Internet-enabled devices and mobile applications, including one for its tabeo tablet, the company said.

The tabeo, which begins selling exclusively at Toys “R” Us stores on Oct. 21 for $149.99, is the retailer’s attempt to gain a piece of the growing market for such devices and digital content that’s dominated by Apple Inc. (AAPL)’s iPad and Amazon.com Inc (AMZN)’s Kindle. The tablet offers electronics books and applications. It also has parental controls, just like the movie service.

Movies start at $2.99 for a 24-hour rental and $5.99 for digital download or streaming. Television shows begin at 99 cents, with most priced at $1.99.

The closely held retailer, owned by KKR & Co., Bain Capital LLC and Vornado Realty Trust, has been offering more exclusive products in a bid to fend off competition. The chain has also tried to increase visits by adding in-store services, such as a reservation list for top-selling toys and the ability to pick up online orders at physical locations.

The company, which also runs the Babies “R” Us brand, filed for an initial public offering in May 2010 to repay debt, and the listing is pending.

Since then, sales have slowed, including a decline during last year’s holiday season when it generated 43 percent of its annual revenue. Most of that drop came from falling demand for video-game titles and hardware.

To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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