With stiff competition from 2009 sensation Redbox, Blockbuster CEO Jim Keyes said yesterday that the future of the Dallas-based DVD rental company hinges on its ability to position the brand across multiple distribution platforms – or it might not be a happy ending for Blockbuster.

“The next 12 to 18 months are going to be very challenging,” Keyes said. “We are building a multichannel platform approach and at the same time we have brand new competitors (namely Redbox and Netflix) certainly taking some of the demand out of the market.”

“The great opportunity for Blockbuster is to adapt to the different use occasions, because that’s what these kiosks represent,” he said.

The CEO said Blockbuster has the option to close additional stores, a strategy he said the media blew out of perspective last year when it focused on the closure of 1,000 stores through this year while failing to mention the addition of 10,000 Blockbuster kiosks.

“The net increase for Blockbuster’s presence in 2010 was actually 9,000 additional points of presence, via kiosks,” Keyes said.