May 05, 2009

DVD Kiosks - The Ongoing saga & latest

blockbuster_logo.gifDVD Kiosks don't go away, they just continue to haunt you...One minute it's Blockbuster doing this, or it's Redbox doing that, or Netflix is busy with what, and finally NCR is buying who? The only other company that generates this type of thrashing about is Coinstar.

This week it's Netflix which deems kiosks a short term threat only and Netflix plans to focus on what it does best and eventually should be the outcome (primary electronic distribution),

  • 5/14 Netflix: Will Streaming Economics Change For The Worse? -- Oppenhemer analyst Jason Helfstein launched coverage of Netflix (NFLX) this morning with a Perform rating and a $35 price target, below yesterday’s closing price at $39.60. His thesis is that, while the company has carved out a successful niche, with 7% of the home video market and 17% of the rental market, “the changing dynamics of DVD consumption will ultimately cut into the company’s margins, and studios will limit or change the pricing of electronic or streaming distribution.”

    He also has some shorter term concerns, including the counter-cyclical nature of the stock, tough comps in the second half and a potentially landscape-changing piece of litigation involving Universal Studios Home Entertainment, which is majority owned by General Electric (GE), and the DVD-kiosk vendor Redbox, which is a subsidiary of Coinstar (CSTR).

    Helfstein contends that the biggest threat to Netflix is the studios themselves, as the competitive landscape shifts. He notes that current streaming economics does not provide enough incentive for the studios to license new content. He reports that existing streaming content was secured under a deal that will expire in 2012. “A large streaming catalog is necessary to drive gross margin expansion and drive rising postage/packaging expenses, as well [to] secure [its] competitive position,” he writes. The risk is that the studios either limit access to content for streaming, or alternatively, that the studios will charge more and hurt the company’s margins.

    According to Helfstein, the home-video market accounted for 54% of the U.S. film industry’s $45 billion in 2008 revenues. He figures Netflix with $1.4 billion in revenue was just under 6% of the home video sector last year, increasing to 7% this year; he thinks Netflix will be at 10% by 2013. He estimates 49% of the home market came from DVD sales, with 21% from in-store video rentals. But he says the industry dynamics are changing, given economic weakness, the emergence of Blu-Ray, and the rise of low-cost DVD rental kiosks from companies like RedBox, which offer new releases for $1 a day.

  • 5/5: DVD Kiosks Don't Scare Netflix -- Unlike its competitors, some of which are trying to compete with kiosks head-on, Netflix plans de-emphasize physical DVDs. Instead, it is focusing on it growing library of movies available online and is tinkering with its online recommendation tools. Already the company has begun to introduce finer parsing of the categories it uses to suggest movies to customers, one of the key lures for its subscribers.

  • 4/27: Netflix: Why the Disappointment? BusinessWeek

  • 4/27: Redbox users share free movie codes

  • 4/27: NCR Deal May Be Blockbuster's Salvation

  • 4/23: Is Blockbuster's Kiosk Move Too Late? StorefrontBacktalk

  • 4/24: Netflix Worried About DVD Kiosks, Not iTunes Or Hulu (NFLX) -- The Business Inside

  • 4/24: Netflix's looming nemesis: The buck-a-night DVD kiosk?

  • 4/21: Blockbuster set to roll out rental kiosks

  • 4/21: DVD Kiosks - NCR Completes Purchase of TNR

    Historical Entries Here categorized as DVD Movies

  • DVD Kiosk - Redbox's $1 vending-machine video rentals worry movie studios -- DVD-Movies -- 2009.03.30

  • Selling movies in retail store solution -- DVD-Movies -- 2009.01.03

  • DVD Kiosks - Redbox expanding to 7-Eleven -- DVD-Movies -- 2008.12.17

  • Universal Studios Threatens DVD Market -- DVD-Movies -- 2008.10.31

  • DVD Burner with Qflix -- DVD-Movies -- 2008.09.16

  • Video Technology - Streaming Netflix or Sony -- DVD-Movies -- 2008.08.14

  • DVD Burning-On-Demand Not So Much In Demand; Players Delay Plans -- DVD-Movies -- 2008.08.05

  • Blockbuster and NCR Announce Strategic Alliance to Launch DVD Vending Kiosks -- DVD-Movies -- 2008.08.04

  • Polar Frog Ready to Burn CSS at Kiosks -- DVD-Movies -- 2008.08.04

  • DVDs for Gas? e-Play Kiosks Make It Possible -- DVD-Movies -- 2008.07.17

  • Motley Fool Shoots Down Blockbuster/Keyes Idea -- DVD-Movies -- 2008.06.03

  • Blockbuster unveils in-store kiosk prototype -- DVD-Movies -- 2008.05.28

  • Technology - skip the DVD by mail and download direct -- DVD-Movies -- 2008.05.20

  • Can the USB go from computer dork to Hollywood player? -- DVD-Movies -- 2008.05.15

  • Coming soon: Movies on flash memory cards -- DVD-Movies -- 2008.03.03

  • DVD On Demand Demo by Nero at CES -- DVD-Movies -- 2008.01.26

  • DVD Rental kiosk pilot by Blockbuster, and security liability -- DVD-Movies -- 2008.01.26

  • Manufacturing on Demand or MOD -- DVD-Movies -- 2008.01.24

  • DVD Kiosks - Blockbuster shares slide -- DVD-Movies -- 2007.12.06

  • DVD Kiosks - Blockbuster and Papa Johns Trial in Kentucky -- DVD-Movies -- 2007.11.22

  • Walgreens says it will do DVD burning -- DVD-Movies -- 2007.10.29

  • Movie DVDs at Kiosks -- DVD-Movies -- 2007.09.27

  • Primera and Sonic Partner on Disc on Demand -- DVD-Movies -- 2007.09.27

  • Kiosk-to-hard-drive video movie rentals -- DVD-Movies -- 2007.08.16

  • KIOSKS Case Study -- RFID and DVD Dispense -- DVD-Movies -- 2007.04.20

  • DVD Kiosks -- Wegmans next in line -- DVD-Movies -- 2007.04.02

  • DVD Rental Kiosks -- DVD-Movies -- 2006.12.04

  • Self-Service Kiosk Reviews -- Video Express Kiosk at Cub Foods -- DVD-Movies -- 2006.11.26

  • RedBox Deploys Remote Management system -- DVD-Movies -- 2006.10.28

  • DVD Burning Kiosk keefner DVD-Movies 2006.07.11

  • Hollywood, retailers eye movie download kiosks keefner DVD-Movies 2006.06.05

  • DVD Burn on Demand Kiosk keefner DVD-Movies 2006.04.26

  • New player in DVD burning kiosk business -- DVD-Movies -- 2006.01.13

  • Case Study - DVD Burning Kiosks for Amusement Parks -- DVD-Movies -- 2005.09.24

  • DVD Format War -- DVD-Movies -- 2005.08.02

  • Tesco UK Movie Download Move keefner DVD-Movies 2005.05.09

  • DVD Movie Rental Prospects -- DVD-Movies -- 2005.03.24

  • Disposable DVDs -- DVD-Movies -- 2004.06.15

Posted by staff at May 5, 2009 09:45 AM