Gokis Kiosk Self-Service

Hollywood, retailers eye movie download kiosks

In a bid to preserve shelf space and fight slowing DVD sales, major retailers including Wal-Mart Stores Inc. have held talks with Hollywood's studios to develop kiosks where consumers can copy movies and TV shows onto DVDs and devices, industry executives said.

Hollywood, retailers eye movie download kiosks-Reuters.com

By Sue Zeidler

LOS ANGELES, June 2 (Reuters) - In a bid to preserve shelf space and fight slowing DVD sales, major retailers including Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) have held talks with Hollywood's studios to develop kiosks where consumers can copy movies and TV shows onto DVDs and devices, industry executives said.

Installing video-burning kiosks in retail stores would help counter the slowing growth in the $24 billion home DVD market, executives said.

Retailers have used discounted DVDs to lure customers to stores and sell them other goods. But increasingly, Hollywood's studios are starting to offer digital downloads of films, TV shows and videos to cell phones, PCs and laptop computers.

Retailers are concerned that digital downloads might spell an end to the sale of DVDs, and see the download-to-burn kiosks as a way to keep them in the DVD business.

"There have been discussions with all the major retailers who have an interest in kiosks because they would let them grow their product offerings without using a lot of shelf space," said Jim Wuthrich, senior vice president, digital distribution for Warner Bros. Home Entertainment Group.

"Burning DVDs in stores could happen in 2007," he said, but noted various licensing and technology hurdles still remained. Warner Bros. is the studio owned by Time Warner Inc. (TWX.N: Quote, Profile, Research).

Retailers like Wal-Mart, Target Corp. (TGT.N: Quote, Profile, Research) and Best Buy Co. Inc. (BBY.N: Quote, Profile, Research) represented 50 percent of all sell-through retail DVD sales in 2004, according to the Video Software Dealers Association (VSDA).

A spokeswoman for Wal-Mart confirmed that the world's largest retailer was looking into kiosks, but said no formal announcements or decisions were expected soon.

The video industry group's most recent stand-alone survey for Wal-Mart put its DVD sales at $3.2 billion in 2003, more than double those at Target, the No. 2 sell-through retailer.

Target and Best Buy officials were unavailable to comment.

Restaurant chain McDonald's Corp. (MCD.N: Quote, Profile, Research) and movie rental retailer Movie Gallery (MOVI.O: Quote, Profile, Research) have experimented with kiosks that are more like vending machines for renting physical DVDs.

McDonald's has put its $1-per-night kiosks, which hold about 500 disks, in hundreds of restaurants in a bid to lure consumers into a one-stop experience to eat first, then rent a movie to take home and watch.

By contrast, digital on-demand video kiosks could enable retailers to offer all 6,600 Warner Bros. movie titles because they would be downloaded immediately via a high-speed Internet connection at the kiosk. Retailers could use shelf space to stock only the most recent releases.

"It's been a big topic of discussion. The technology does exist currently to enable DVD on-demand through a kiosk," said Lawrence Dvorchik, general manager of KioskCom, a leading trade show on interactive self-service kiosks held in Las Vegas.

"I'd imagine that some of the holdup can be tied to the rights issues. That is the way that it was with the music burning kiosks," said Dvorchik.

Officials from other major studios like Walt Disney Co. (DIS.N: Quote, Profile, Research) and General Electric Co.'s (GE.N: Quote, Profile, Research) Universal Studios also had no immediate comment. But sources said all the studios were looking at the idea.

Posted by keefner at June 5, 2006 07:37 AM