November 20, 2009

Movie Gallery to test Digiboo digital kiosks

NOV. 19 | DIGITAL: A week after Movie Gallery began a four-store trial test of digital movie kiosks with MOD Systems, the retailer has joined with a second digital kiosk company to introduce up to 100 additional kiosks in stores nationwide next year.

Movie Gallery announced today a partnership with digital kiosk upstart Digiboo, founded by a group of former MGM Home Entertainment execs, to pilot test kiosks in Hollywood Video and Movie Gallery stores nationwide beginning with a handful of locations in January. The retailer will add kiosks to more locations throughout the spring.

Los Angeles-based Digiboo’s touch-screen kiosks can hold more than 1,000 movie and TV shows, which can be downloaded to USB 3.0 flash devices within a minute. Movies, which will be protected by DRM, can be played back through laptops, PCs, TVs and other set-top devices with USB drives. Digiboo doesn't yet have content deals in place, but is in talks with the major studios to license new release and catalog movies and TV shows for the kiosks said CEO Richard Cohen. The company plans to offer films for rental and sale, priced in line with discs in Hollywood stores. "It definitely won't be Redbox pricing," he said.

“Digiboo’s technology platform will allow us to provide content to our customers in a new way that’s both more convenient and cost-effective,” Movie Gallery chief marketing officer Clifford Torng said in a statement announcing the deal. “This new alliance enables us to provide our customers with significant flexibility in terms of where, how and when they acquire and view content, as the kiosks can be placed in a number of different environments, and USB flash drives can be easily made to work with virtually any video playback device.”

Digiboo, a new entrant in the digital kiosk business, was started by a group of home entertainment video vets including Cohen, who served as CEO of DVD kiosk company TNR Entertainment and president of MGM Home Entertainment and Consumer Products. Former MGM Home Entertainment execs Jeff Karbowiak, Blake Thomas and Eric Villette are the other founders. Actor Morgan Freeman and Lori McCreary's Revelations Entertainment has signed on to financially back Digiboo for an undisclosed amount. Revelations Digital CEO Samuel Edge will serve as the chief technology officer at Digiboo.

Revelations previously launched online movie site Clickstar, a joint venture with Intel that quietly closed last year after failing to gain traction with consumers. Digiboo is also consulting with Intel, Cohen said.

Cohen said while he was at TNR, he was approached about many different digital kiosk options that just weren't easy enough for consumers or didn't add any convenience over DVD kiosk rentals. He believes Digiboo's solution solves both problems and says consumers are more comfortable with kiosks and digital movies than they were even a year ago.

In announcing the deal, Cohen called Movie Gallery and Hollywood Video the ideal partners who "not only offer convenient, high-traffic retail locations, but their consumer profile and proven expertise in merchandising to those consumers"

Digiboo plans to add videogames, music and books to the kiosks eventually. The company plans to place its kiosks in other retail stores, airports, coffee shops and college campuses.

"We want to be at locations where we think it’s the right demographic and the right target audience," Cohen said. "We're not going to be in gas stations or 7-11's for a good long time. We're looking for high-traffic locations with a somewhat tech-savvy demographic."

They also don't have plans to work with TNR or other existing DVD kiosk companies, Cohen said.

This is the second digital kiosk pilot program for Movie Gallery. The chain and Blockbuster began a trial test of MOD Systems kiosks last week.

MOD kiosks offer new release and catalog movie rental downloads from Warner Bros. and Paramount Pictures. Movies are downloaded to SD cards, the same as used in digital cameras to store photos. Cards can be plugged into MOD GreenPlay devices for playback on the TV, though in the coming months, those cards will be playable in SD slots found on a growing number of TVs, Blu-ray Disc players and other consumer electronic devices.

Seattle-based MOD is backed by Toshiba and NCR, which already operates DVD kiosks nationwide.

Cohen said MOD is a substantial player in the space, ”but we think we have a different business model and a different consumer proposition. We think it will be a very big area. There will be more than one player.”

Posted by staff at November 20, 2009 10:37 AM