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Coinstar will seek to build on the success of its Redbox $1 movie rental kiosks with a line of automated machines that dispense coffee “that tastes pretty close to a cup from any upscale coffee bar,” according to reporter Nick Wingfield of the New York Times.

The Bellevue-based company is currently testing the coffee machines in partnership with Starbucks’ Seattle’s Best Coffee brand, with plans to have about 500 of them in place by the end of the year around the country. The beans are ground fresh on demand, and each cup costs $1 (of course).

The company’s coffee kiosk ambitions actually date back to 2008, but they’re back on the front burner amid a broader effort by Coinstar to diversify its business beyond movie rentals and coin-counting. Redbox two weeks ago announced a new partnership with Verizon to develop a combined DVD rental and movie streaming subscription service.

Here’s a picture of one of the coffee machines in the wild in Virginia, via Patrick Seitz. Note the label saying it’s “powered by Redbox” — underscoring the fact that the Redbox brand has, in many ways, become bigger than the Coinstar brand.

Other kiosk concepts being tested by Coinstar include Gizmo, which offers refurbished electronics.

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