December 17, 2010DVD Kiosks - Warner Bros. Joins NCR Corp.NCR Corp.’s aggressive target of 10,000 kiosks by this year-end and the achievement of break even in its Entertainment business by fiscal 2011 are encouraging. -- Zacks Warner Bros. Joins NCR Corp. - Zacks.com Technology and solutions provider NCR Corp. (NCR - Analyst Report) announced that it has inked a distribution deal with Warner Home Video, the home video unit of Warner Bros. Entertainment Inc. nder the terms of the deal, NCR Corp.’s Blockbuster Express kiosks will rent Warner Home Video's new movies 28 days after the initial release. The agreement will be effective from January 2011.
The Blockbuster Express kiosks are the result of a partnership between NCR Corp. and Blockbuster Inc. that started about two years ago when the retailer aggressively set out to acquire market share in the digital kiosk segment. We believe that NCR Corp. will be able to capitalize on the growth potential in the DVD kiosk segment. As per market sources, roughly 60% of people borrowing DVDs prefer to do so through self-service kiosks. The DVD kiosk market has ample room for growth, with Adams Media Research predicting $2.0 billion in revenue through 60,000 kiosks by 2014. Adams Media Research is the US media industry's key source of market data and financial analysis on the entertainment, TV, video game and digital media markets. NCR Corp.’s aggressive target of 10,000 kiosks by this year-end and the achievement of break even in its Entertainment business by fiscal 2011 are encouraging. Additionally, by fulfilling the target of 10,000 DVD kiosks, NCR will be in a better position to tackle competition from Coinstar Inc., which is currently the leading provider of automated retail solutions. Coinstar’s Redbox (DVD business) operates 22,400 machines at locations including Wal-Mart Stores Inc. (WMT - Analyst Report), McDonald’s Corp. (MCD - Analyst Report) and Walgreen Co. (WAG - Analyst Report). We believe the association with Warner Bros. could prove to be a positive catalyst for NCR Corp.’s retail business. Apart from this, we remain encouraged by NCR Corp.’s association with leading banks, such as Barclays Bank plc (BCS) and UniCredit Bank, which have upgraded their Automated Teller Machines and strengthened its financial services business. We are also encouraged by the company’s market leadership, successful acquisitions, new product introductions and continued customer wins. However, we believe that near-term visibility is limited, since it will be some time before the company’s robust business model and restructuring initiatives begin to drive growth. Currently, NCR Corp. has a Zacks #3 Rank, which translates in to a short-term Hold recommendation.
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