Gokis Kiosk Self-Service

Six Questions: Scott McInnes, Founder and CEO of DVDNow Kiosks

Interview by Erik Gruenwedel of HomeMedia magazine of Scott McInnes of DVDNow Kiosks.

Six Questions: Scott McInnes, Founder and CEO of DVDNow Kiosks | Home Media Magazine

The kiosk disc rental market is well represented by the ubiquitous Redbox and Blockbuster Express vending machines. With more than 50,000 combined units in operation nationwide, kiosks account for 36% of the packaged-media rental business, including 34.5% alone by Redbox at the end of the second quarter, according to The NPD Group.

While Redbox and Blockbuster Express offer host retailers turnkey kiosks generating incremental revenue, Vancouver-based DVDNow Kiosks sells units directly to entrepreneurs and retailers seeking 100% of the revenue from both the rental and sellthrough of movies.

DVDNow has 3,000 kiosks in circulation globally, including South Africa, Norway, North and South America, Guam, New Zealand and Australia. The kiosks are all privately owned.

New-release movies are available through wholesalers linked with DVDNow. Titles can also be acquired through alternative sources. The kiosks are capable of handling consumer membership programs; online reservations; rent-here, return-there (within a client’s own network) ease of use; loyalty programs; and pre-paid rental cards.

Kiosk owners also receive online support, including software that enables them to generate business reports, control inventory and manage movie trailers online.

The company scored a coup this year when it signed a deal to license branded kiosks to Best Buy Canada, which plans to have 130 kiosks in operation by February.

Home Media Magazine asked Scott McInnes, founder and CEO of DVDNow, to explain the benefits of kiosk ownership over leasing, among other issues.

■ Why should retailers or entrepreneurs buy a kiosk instead of just receiving commissions from a turnkey unit serviced by Redbox or Blockbuster Express?

McInnes: To make money and drive consumer traffic to the kiosk and/or retailer. Redbox et al. only rent; we have four distinct revenue streams: 1. Rentals; 2. Sales of inventory; 3. Third-party advertising in national, local or regional programs. Much of what’s advertised [kiosk owners] also sells, so there’s a double bang: You get paid for the ads, and if they work, you sell more of the advertised stuff; and 4. Cross promotions. Buy a separate item, get a new-release movie or one-day game rental; buy two 2-liter Cokes, get a free new-release night, etc.

■ How is a DVDNow kiosk better than a Redbox or Express machine?

McInnes: Our kiosks have a glass front with all inventory in original cases. Customers see what’s available, and they can see quickly if this particular kiosk has a movie or game they want. Also, there are shorter lines since people waiting can see what the kiosk stocks.

Companies and entrepreneurs buy kiosks from us and keep 100% of their earnings from rentals, sales, ads and cross-promotions. Redbox reports that of their 35,000 or so kiosks, the average gross revenue is $37,000 per year. That’s $3,083 per month. If you’re Walmart, 7-Eleven, Walgreens, a secondary chain, you get $300 per month. And they put their kiosks outside. That may promote Redbox, but I’ve never seen statistics that show that any Redbox customer goes into any host store and increases its bottom line.

Our kiosks most often go indoors (we can provide outside models), and in addition to the four revenue streams, the mission of those streams is to increase store traffic, increase the number and size of average transactions, and, of course, to increase the top and bottom lines.

■ How does a DVDNow kiosk compete against Redbox or Blockbuster Express?

McInnes: The more Redbox kiosks there are, the better, generally. People have become used to movie and game rental transactions through kiosks, and are confident enough their credit card numbers won’t be sold, that the inventory will work, and that there’s a solid organization behind the business. We benefit from that (and the red color). And when compared side-by-side, people like our kiosks better — more intuitive, glass front, etc.

Also, our clients/kiosks charge more than Redbox or Blockbuster Express. Redbox, as you know, just pushed through a 20% price increase with virtually no advanced notice, proving there is demand for packaged media (as Netflix learned painfully), and Blockbuster Express now has a three-tiered pricing scheme. There is plenty of room for our clients to compete and to do better. Plus all of our machines are owned locally, and in some places clients have generated a lot of local support, particularly personable entrepreneurs from the community.

Finally, many of our machines are in grocery and country stores that are some distance from the nearest Redbox or Blockbuster store. Many of our most successful operators are right there in the mix of ubiquitous Redboxes and doing quite well.

■ With Warner Home Video (and other studios possibly) planning to double the embargo window of new releases to the kiosks, how does DVDNow compete?

McInnes: I suspect that individual entrepreneurs will find a way (read: through retail acquisition), and, obviously, this could be an enormous and profitable advantage for our customers.

■ Do independent video store operators understand the value of extending their retail footprint through kiosks?

McInnes: Yes, we have certainly sold to video stores expanding their brands and footprints. We can also brand kiosks in any way anyone wants, Best Buy being our largest example. But mostly we see people eagerly going into competition with — or replacement of — video stores.

■ Can kiosks work for video games?

McInnes: Games work very well. We have some customers who stock only games. They can be rented and sold for more money, and the typical length of rentals is longer than with movies; some of these are branded with game distributor store brands and logos, more so than video stores.

Six Questions: Scott McInnes, Founder and CEO of DVDNow Kiosks | Home Media Magazine

76 Offers DVD Kiosk at Its Convenience Stores

76/Circle K has taken convenience to a whole new level. In addition to offering gas, groceries, gourmet coffee, meals-on-the-go and thirst-quenching drinks in sizes fit for giants, they’ve now added DVD rentals to the list of things you can acquire at their stations.

76 Offers DVD Kiosk at Its Convenience Stores

South Pacific Petroleum Corporation (SPPC) has partnered up with local small business owner Edeliza Malaga, owner of Movie Queen, to bring out “Movie Queen Express,” a kiosk that is self-transacting and self-contained.

“Movie Queen Express is the poster child of convenience. No lines, 24 hours of operation and 250 of the latest movie titles and video games. Use your debit or credit card and a minute later you have your DVD. You can even rent from one kiosk and return at another. And pricing is comparable and oftentimes better than brick and mortar video stores,” explained Malaga.

Mike Hernandez, SPPC Marketing Director said the company is delighted with this partnership. “We’re very happy to be working and partnering with Ms. Edeliza Malaga and other local vendors, especially when it leads us in the direction of providing more and better service to our customers. Ms. Malaga shared the same sentiment.

“We’re very grateful for the opportunity and extremely excited to team up with 76 on this project. ey’ve always been about convenience and our Movie Queen Express kiosk brings videos, blu-ray and games to your favorite gas station. What’s more convenient than that?”

According to Hernandez, the first Movie Queen Express kiosks available in Sinajana and Malojloj are ready to serve customers this week with additional locations to follow. “is is the first of its kind on Guam and we at 76/Circle K are proud to be the innovators who are bringing it to you.”

For more information on the Movie Queen Express kiosk available at 76/Circle K, please contact Mike Hernandez 588-7200 or [email protected]

76 Offers DVD Kiosk at Its Convenience Stores

Three robotic systems are better than one

Press release talks to redundancy in robotic delivery systems in XONA Media DVD dispensers. Pete Popcke.

Three Kiosks Are Better Than One for Movie Kiosk Operators and Customers

XONA Media addresses key movie kiosk industry challenge of downtime by using three independent but integrated robotics systems, effectively creating a "3-kiosks-in-1" movie kiosk

SAN FRANCISCO, Sept. 7, 2011 /PRNewswire via COMTEX/ -- The top challenge for the movie kiosk industry is downtime due to robotics malfunctions. While all other DVD Kiosks have only one robotics system, the MK3 Movie Kiosk has three unique systems and dispense doors. Having multiple kiosks to choose from is the surest way to keep working kiosks available.

With today's release of System Tools 2.0, XONA Media LLC now effectively makes multiple working kiosks available within one movie and game kiosk; if one robotics system malfunctions, consumers can still rent from the other available robotics dispense systems in the same kiosk, enabling the kiosk to stay open for business and generate revenue, with customers unaware of anything being awry, even while a Robotic Dispense System may need addressed.

System Tools 2.0 enables independent, remote management of the separate Robotics Systems. The Operator can be automatically notified of issues, and remotely diagnose, troubleshoot and remedy the issue in a specific Robotics System. In contrast, operators of other movie kiosks would be out of business until a technician traveled to the kiosk, which is costly both financially and in terms of customer perception.

"With any machine-based business, there will be occasional maintenance required. It's just part of the business," says company COO, Pete Popcke. He adds, "The trick is in how to minimize disruption, lost revenue and operating expenses. One way to do that would be to install multiple kiosks in case one goes down. We did exactly that, except we engineered multiple kiosks into one single unit. Now, not only have we eliminated problematic disc cases which are the top cause of jams, but we've packed three kiosks into one."

About XONA Media

XONA Media is a media technology and services company providing innovative entertainment kiosk systems and industry firsts, including the only game and movie kiosk capable of dispensing both physical media and digital formats while maximizing uptime using multiple robotics systems and avoiding problematic, jam-prone disc cases. With a team of automated kiosk-based retail and media distribution experts, XONA Media leverages insights and future-forward technology to dramatically reduce the costs of retail operations while creating transformative consumer experiences. Additional information is available at http://www.xonamedia.com .

This press release was issued through eReleases(R). For more information, visit eReleases Press Release Distribution at http://www.ereleases.com .

SOURCE XONA Media

Three Kiosks Are Better Than One for Movie Kiosk Operators and Customers - MarketWatch

Seeking Alpha - Start Collecting Coinstar

Big writeup on seeking alpha on Coinstar, its business, its profitability/financials and overall outlook.

Start Collecting Coinstar - Seeking Alpha

Coinstar (CSTR) is a leading provider of automated retail solutions offering self-service coin counting machines and DVD rentals through its Redbox kiosks at number of retail locations. At present, Coinstar has 30,000 self service Redbox kiosks at 26000 locations. Coinstar's kiosks are located mostly at leading grocery stores, mass retailers, drug stores, restaurants and convenience stores like Wal-Mart (WMT), Kroger (KR), Walgreens (WAG) and McDonalds (MCD). Customers use a touch screen to select movies at DVD kiosks and pay with either credit or debit card.

Redbox gets it DVD movie titles through licensing arrangements with various studios like Paramount, Universal Studios, 20th Century Fox, Warner, Lionsgate, Sony and other studios.

The coin business is another operation of Coinstar's business where consumers can convert their coins to cash at coin-counting kiosks. Coinstar installed its self-service coin machines at various retailer locations across the U.S., Canada, Puerto Rico, Ireland and the United Kingdom. Coinstar owns and operates coin-counting machines at approximately 18,900 locations. Coin-counting revenue is generated through transaction fees from their consumers and retailers.

Coinstar generates nearly 20% of its revenue from Wal-Mart, 14% from Walgreens and 11% from Kroger stores. These three companies represent nearly 45% of its total revenue.

In the year 2010, operating income from Coinstar's DVD segment increased approximately 89% from previous year. Operating income from the Coin Services segment decreased approximately 7.8% due to patent settlement with "ScanCoin" and the disposal of coffee kiosks.

Growth Spurts:

As end of the year 2010 Coinstar's revenue reached $1.436 billion from 2007 revenue of $307 million which is an outstanding cumulative growth of 67%, where as gross margin experienced a cumulative growth of 42% to $435 million in the year 2010 from $154 million 2007.

Read rest of article - Start Collecting Coinstar - Seeking Alpha

A Solution to NCR's Blockbuster Lawsuit: Buy Coinstar

Arguing the real solution in the DVD vending space is for NCR to just buy Coinstar and be done with it. Pretty good argument...

A Solution to NCR's Blockbuster Lawsuit: Buy Coinstar - Seeking Alpha

Mention NCR Corporation (NCR) to the average person (including myself) and he would not be able to tell you what the company does. Some irony exists in that reality, given that most of us tend to encounter NCR on a daily basis. From the company's latest annual report:

The kiosk business includes DVD rental machines. NCR brands these machines using the Blockbuster (BLOAQ.PK) Express trademark. Long story short, Blockbuster's new owners hope to ixnay the whole arrangement. NCR has sued, arguing that, regardless of Blockbuster's sale to DISH Network (DISH), they have the right to use the Blockbuster likeness on their kiosks. While I understand the lawsuit, it surprises me a bit. It seems to me that NCR could spend its time -- and money -- more wisely by making an aggressive attempt at dominating the DVD rental kiosk space.

For months, rival Coinstar (CSTR) has made empty threats that it will partner with somebody, somewhere to commence online streaming. Depsite its ups and downs, Coinstar finally appears back on track. If its smart, it thought better of getting into a streaming effort it simply cannot afford. Management seems better focused in recent weeks. Last week, Coinstar closed a deal to bring 1,400 of its coin-counting kiosks to Safeway (SWY) stores across the country. One analyst believes the Safeway deal serves as an end-around to knock Blockbuster kiosks out of the grocery store chain. Coinstar leads the space numbers-wise; it operates roughly 30,200 Redbox machines at more than 26,000 locations. NCR, however, bites at its heels by penetrating more and more markets.

I don't see the point in these squabbles -- NCR v. Blockbuster or Coinstar v. NCR. NCR could render the Blockbuster thing moot. And Coinstar could provide incredible value to its shareholders -- people it colored very unahppy not so long ago -- by selling out to NCR. In combination, the two companies could not only lock up the DVD rental machine market, but they could become the primary force in the self-service kiosk space.

From a financial standpoint, the deal makes sense. It's quite feasible for NCR. And Coinstar would be wise to accept a bid. According to Yahoo! Finance, NCR has about $480 million in cash and $11 million in debt, while Coinstar counts $23 million in cash and more than $355 million in debt. If Coinstar has its kiosk sights set on anything beyond coins, DVDs, and video games, it needs some firepower behind these efforts. NCR can provide it. The company already has a massive self-service kiosk presence in several areas (See above excerpt). From time to time, it becomes obvious that two companies would be better off teaming up, as opposed to knocking one another out in a war of attrition.

As for the two stocks, NCR has enjoyed a steady run since last year. The CSTR chart is downright erratic and somewhat hysterical.

For a while I have held the belief that Coinstar will not end up going at it alone. It seems that the long-rumored Amazon.com (AMZN)/Coinstar partnership died somewhere on the side of the road. Even though digital efforts such as streaming will ultimately rule, just as cable can still exist, so can the kiosk business, as long as it does not relegate itself to media items. That's why an NCR/Coinstar union makes perfect sense. On that sentiment -- or something similar shaking out -- I think the following investment approach could make sense.

Take a relatively short-term approach to CSTR, banking on a takeover or news of a major partnership finally coming to fruition. I would play this notion using in-the-money CSTR calls. In-the-money calls cost more than out-of-the-money options, but there's a reason for that -- you take less of a risk (i.e., have a better probability of profiting) in exchange for less than a Lotto jackpot reward. Personally, I would wait for a pullback in CSTR -- the stock's performed well lately, even in the face of an overall market decline -- and then consider something like the CSTR October $42.50 calls.

As for NCR, there's not a ton of volume or open interest in the options, therefore I would lean toward buying the stock outright. After its impressive run, it has pulled back slightly this month. This might be a good time to accumulate the stock on dips. It presently trades with a forward P/E of just under 10.

While I am not usually one to get into stocks on takeover speculation, there's a time and a place for the approach. When it seems obvious that something's got to give in a particular business, I have no issue going long on the count of potential M&A activity or a partnership as long as the companies involved run strong businesses. Because Coinstar does not inspire a ton of confidence, I would only put a small amount of capital into its options. I would be willing to go bigger into NCR, given its stronger balance sheet and diverse revenue streams.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

A Solution to NCR's Blockbuster Lawsuit: Buy Coinstar - Seeking Alpha

Dish, NCR Fight for Rights to Blockbuster Brand in Movie-Rental Kiosks

Now that Blockbuster goes bankrupt, Dish says NCR contract invalid. And so the fight begins...

Dish, NCR Fight for Rights to Blockbuster Brand in Movie-Rental Kiosks - Bloomberg
Dish, NCR Fight for Rights to Blockbuster Brand in Movie-Rental Kiosks
By Alex Sherman - May 13, 2011 4:22 PM MT

Dish Network Corp. (DISH), the U.S. satellite-TV provider that acquired Blockbuster Inc. (BLOAQ) last month, told NCR Corp. (NCR) that its contract to license the Blockbuster name on movie-rental kiosks is invalid.

Dish rejected the contract as part of Blockbuster’s court- ordered bankruptcy proceedings and sent NCR a termination letter, expressing its intent on ending the pact, NCR spokesman Jeff Dudash said. NCR disagrees with Dish’s conclusion that the contract is void, and plans to continue to brand its movie kiosks with the Blockbuster Express name, Dudash said.

“There will be legal proceedings to address this that will come up at the end of the month,” Dudash said. No lawsuits have been filed yet by either company.

NCR builds kiosks, often placed in grocery and convenience stores, that allow customers to rent and drop off movies. The company pays Blockbuster for the use of its brand and collects all revenue from rentals. NCR says the Blockbuster Express name, design and related trademarks are held by a trust that wasn’t part of Blockbuster’s bankruptcy filing. Duluth, Georgia-based NCR has branded more than 9,000 kiosks with the Blockbuster name, Dudash said.

If Dish successfully voids the contract, the Englewood, Colorado-based company will decide whether it wants to own the kiosk business, renegotiate deal terms with NCR or find another company that makes kiosks to license the name.

“Blockbuster continues to evaluate the kiosk-rental business and the variety of ways we provide access to our expansive inventory of family entertainment,” Marc Lumpkin, a Dish spokesman, said in an e-mail.

Uniting the Blockbuster brand under the Dish umbrella isn’t a priority for NCR, according to Dudash, who said NCR has become comfortable licensing the name.

“It’s something we’ve been doing for several years,” said Dudash. “The business falls in line with our strategic priorities to use our expertise in self-service technologies to deliver entertainment to consumers.”

Dish completed its $320 million acquisition of Blockbuster on April 26. Blockbuster filed for bankruptcy in September with 5,600 stores, including 3,300 in the U.S.

Dish fell 39 cents, or 1.3 percent, to $28.81 at 4 p.m. New York time on the Nasdaq Stock Market. NCR lost 25 cents to $19.55 in New York Stock Exchange composite trading.

Fujitsu Company, PFU Systems, Launches Groundbreaking Kiosk Technologies at CETW

PFU Systems’ Digiboo Movie Download Kiosk, New Wall Mount Model, Enhanced Remote Management System, Salesforce Integration Features to be Revealed

Fujitsu Company, PFU Systems, Launches Groundbreaking Kiosk Technologies at Customer Engagement Technology World (CETW) - Business Wire - SunHerald.com

SAN JOSE, Calif. -- Fujitsu Company, PFU Systems – a leading technology solutions provider – announced today it will reveal its turn-key kiosk offerings which are designed to immerse customers in an interactive experience, cater to kiosk managers with next-gen tools and respond to changing business requirements. PFU Systems will also exhibit a preview of its solution for Digiboo Inc.’s Movie Download Kiosk. In addition, PFU’s sleek new wall mount model, MEDIASTAFF FX, will be debuted at booth #729 in the Moscone Center, April 27-28, during Customer Engagement Technology World.

On display will be the preview of PFU’s solution created for Digiboo’s forthcoming Movie Download Kiosk which provides the easiest way to rent and purchase the latest digital movies. Through PFU’s custom kiosk solution, customers will be offered more than 1,000 movies for rent or sale, which they can download and then watch on any PC, TV, laptop or netbook, eliminating the need to return a DVD.

“We chose PFU Systems as a partner not only in light of its long standing reputation but also because they provide a comprehensive solution that includes custom hardware, advanced kiosk platform software, and remote management systems,” said Richard Cohen, CEO of Digiboo. “PFU Systems met our needs for reliability, technical capabilities and cost effective performance in our new movie download business.”

PFU Systems will also showcase its new hardware, MEDIASTAFF FX, a highly versatile solution with flexible mount options, including wall, desktop or stand-alone. The offering is energy efficient, highly customizable, delivers a large ROI and is among the most reliable in the industry. PFU will also feature new software updates, including an enhanced Remote Management System, now offered as cloud services/SaaS, which reduces time-to-market and kiosk management costs even further. On display will also be the Visitor Management Kiosk designed to integrate with CRM applications on Salesforce platform.

“Our full range of new versatile kiosks and features, including the SaaS option of the Remote Management System, provide greater flexibility to respond to trends and meet the needs for our customers,” said Hiroji Fukui, Director of Marketing and Business Development, PFU Systems. “We continue to innovate, and with PFU’s unique Kiosk integration technologies, the benefits of cloud computing – flexibility, scalability and reliability – are now available for self-service solutions for the first time.”
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Fujitsu Company, PFU Systems, Launches Groundbreaking Kiosk Technologies at Customer Engagement Technology World (CETW) - Business Wire - SunHerald.com

Business case for Coinstar from investor viewpoint

Reasons for being bearish long term on Coinstar. How Netflix, NCR and normal technology flow work against them.

Why Coinstar Is a Better Short Than Netflix - Seeking Alpha

There are plenty of articles detailing why Netflix (NFLX) is a good short. These articles make some great points, and Netflix may very well be a good short, but in our opinion it is primarily a valuation short.

Coinstar (CSTR), on the other hand, faces many of the challenges that Netflix faces, but has no subsciber base and no streaming strategy. RedBox is a business that will ultimately be rendered obsolete. The traditional coin business is also in secular decline, which the company has offset with price increases (higher percentage take on the coin kiosk) for the time being, but the secular tailwinds that caused such bullishness around Visa (V) and MasterCard (MA) (the move to a cash/coinless society) create secular headwinds for the coin business.

Investment Thesis

Coinstar’s primary growth engine, the RedBox DVD rental business, dominates an industry that is fast becoming obsolete – physical content delivery. As movies-on-demand and internet streaming of media become more and more prevalent, the DVD industry will accelerate its secular decline. Coinstar is currently priced like a growth stock and garners the correspondingly high multiple because it has been a strong growth story by taking significant market share, albeit in a slowly dying medium. As the company saturates the market, its organic growth will slow, and as the industry’s secular trends accelerate, this will become overwhelming. Ultimately, the obsolescence of DVD will cause sales to plateau, then decline, resulting in a significant multiple contraction.

Bear Case:

MOD Systems & Meridian NRF Announcement

Consumers can purchase or rent new release movies from Meridian kiosks and transfer to Secure Digital (SD) memory cards, USB sticks, MP3 players and Android and Blackberry mobile phones. The two companies made the announcement at the National Retail Federation confab running through Jan. 12 in New York.

MOD Systems Expands Kiosk Reach | homemediamagazine.com

OD Systems Expands Kiosk Reach

By : Erik Gruenwedel | Posted: 10 Jan 2011
[email protected]

Digital movie and music kiosk operator MOD Systems Jan. 10 said it is increasing the scope of its “Download2Go” platform through a distribution deal with kiosk operator Meridian Zero Degrees.

Consumers can purchase or rent new release movies from Meridian kiosks and transfer to Secure Digital (SD) memory cards, USB sticks, MP3 players and Android and Blackberry mobile phones.

“Consumers need easier and more relevant ways to access entertainment, and purchasing digital titles fits extremely well with their lifestyles. Innovation is the cornerstone of both MOD and Meridian’s product development strategies and our relationship demonstrates this shared approach,” said Anthony Bay, CEO of MOD Systems.

The two companies made the announcement at the National Retail Federation confab running through Jan. 12 in New York.

Last month MOD cut its staff by 15 employees, or 35%, bringing its personnel count to about 30 people.

MOD Systems Expands Kiosk Reach | homemediamagazine.com

CES: Flix on Stix moves movies from kiosk to USB

Officially unveiling and demoing its movie service at CES this week, Flix on Stix will offer thousands of movie titles--both recent films and older titles--from its upcoming line of kiosks.

CES: Flix on Stix moves movies from kiosk to USB - CES 2011 CNET Blogs

LAS VEGAS--If Flix on Stix has its way, you may soon be downloading movies directly from kiosks to a USB flash drive.
Officially unveiling and demoing its movie service at CES this week, Flix on Stix will offer thousands of movie titles--both recent films and older titles--from its upcoming line of kiosks.

Starting in the first quarter, the company will be launching kisoks across shopping malls, supermarkets, bookstores, and college campuses. The kiosks will debut across the U.S. initially, but Flix on Stix says there's been interest from other countries as well.

Each kiosk contains a hard drive connected to the Internet. As many as 1,500 movies can be stored on a drive at any time. Just plug your USB drive into the kiosk, choose your movie, and it's automatically transferred.

You can sign up for a free membership with the service to search across the full gamut of movies in the Flix on Stix library from your own PC. You tell the service what movie you want, and it's downloaded to your local kiosk before you get there.

Each downloaded movie comes embedded with the Flix on Stix player, so no separate software is needed, and you can use any USB stick or drive. You can currently play a movie directly on a PC or Mac, or on the company's set-top box. You'll also be able to play the content on a TV, when the necessary Flix on Stix firmware becomes available.

Movies will be offered in either standard or high definition. Flix on Stix representatives say a standard-def movie will take about a minute and a half to download to a USB drive, while a high-def movie will take about 5 minutes.

Users can opt to either buy or rent a movie. Once the rental period is up, Flix on Stix automatically gives you an option to continue to rent or to buy the movie. If you decline, the movie simply disappears from your USB stick.

Down the road, Flix on Stix is looking to make games available for download. But size is a challenge. With a game chewing up a lot more space than a single movie, the company is looking into various compression techniques to squeeze huge games into small spaces. Initially, games will be for the PC, but Flix on Stix eventually wants to offer titles for the Wii, Xbox, and other platforms.

CES: Flix on Stix moves movies from kiosk to USB - CES 2011 CNET Blogs

DVD 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 agreement enables NCR Corp. to add more titles to its collection and deal directly with the studio. This will actually reduce the acquisition cost of new DVDs from third parties. Moreover, kiosk users will be able to access new releases at cheaper rates.

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.

Warner Bros. Joins NCR Corp. - Zacks.com

MOD Cuts Staff By 35%

Digital movie and music kiosk operator MOD Systems has cut its staff by 15 employees, or 35%, bringing its staff down to about 30, company CEO Anthony Bay said Dec. 14.

MOD Cuts Staff By 35% | homemediamagazine.com

The cuts came primarily in the company’s marketing and engineering departments, as MOD is turning more toward outside partners to help with marketing, and current kiosks don’t require much in the way of updating, Bay said.

“While we’re pleased with our product development and performance to date, we need to take important and appropriate steps to ensure the long-term health of the company,” Bay wrote in a company blog post. “Having to say goodbye to exceptional employees is one of the most difficult decisions we, as a company, can make. We recognize the tireless and passionate contributions they’ve made to the company, and we just cannot thank them enough for their commitment.”

Bay also said that the company is looking into additional financing and is reducing sales and marketing spending.

MOD Systems currently has more than 60 digital movie and music kiosks deployed nationwide.

MOD Cuts Staff By 35% | homemediamagazine.com

DVD Kiosks - new "premium" DVD's released

New "premium" DVDs being offered now at select Blockbuster locations. The 28 day headstart deal. It will likely drive some significant traffic and revenues..

‘Inception’ joins ‘Knight and Day’ as first premium DVD kiosk rentals - Yahoo! News

Inception’ joins ‘Knight and Day’ as first premium DVD kiosk rentals

By Ben Patterson – Tue Dec 7, 12:11 pm ET

Starting Tuesday — today — you'll find both the Christopher Nolan-directed blockbuster "Inception" and the Tom Cruise dud "Knight and Day" in selected Blockbuster Express DVD kiosks, about a month earlier than you'll find them through Netflix or Redbox. The catch?

You'll have to pay $3 for the first night's rental.

Both "Knight and Day" and "Inception" are now available in about 900 NCR-operated Blockbuster Express DVD kiosks with "premium" pricing: $3 for the first night, then the usual $1 for subsequent nights, according to NCR spokesman Jeff Dudash. Test markets include San Francisco, Phoenix, Miami and Atlanta.

The idea of NCR's new premium pricing stunt is to see whether consumers will be willing to pay more to rent a new DVD the day it goes on sale, rather than waiting 28 days for a rental "window" to expire.

20th Century Fox and Universal just inked new distribution deals with NCR that involve holding back their latest DVDs from Blockbuster Express kiosks until they've been on retail shelves for 28 days, in the hopes that the rental delay will boost disc sales. In return for the 28-day wait, the studios are offering their movies to NCR (as well as Redbox and Netflix, which have already signed similar deals with the studios) for steeply discounted prices.

The two studios are participating with NCR (which owns and operates Blockbuster Express kiosks, not Blockbuster Inc.) in the pricing test, with "Knight and Day" being the first (previously announced) "premium" Fox title.

NCR, however, has yet to strike a distribution deal with Warner Bros., the studio behind "Inception," which means that the studio's movies aren't necessarily subject to a 28-day delay through Blockbuster Express kiosks. (It also means that NCR had to get its "Inception" discs from sources other than the studio, and probably at retail prices.)

NCR decided to add "Inception" anyway, because "we felt like that was an appropriate title to include in the test."

That means Blockbuster Express customers in areas outside the four initial "premium" test markets won't be able to rent "Inception" until early January, the same wait that Netflix and Redbox users will have to endure. (Don't worry, we'll survive.)

The 28-day wait for DVD rentals at kiosks and through Netflix is quickly becoming the rule rather than the exception. Netflix recently signed a pact with Sony that includes a 28-day wait for its latest releases, leaving Disney and Paramount as the last two studios that offer so-called day-and-date DVD rentals to Netflix subscribers.

And though NCR has 28-day agreements only with Fox and Universal for now, expect that to change soon. An NCR exec tells Dow Jones Newswires that the company is in "constructive discussions" with the other major Hollywood studios.

So here's the big question: Would you pay $3 for the first night's rental of "Inception," if it meant not having to wait until early January?

‘Inception’ joins ‘Knight and Day’ as first premium DVD kiosk rentals - Yahoo! News

DVD Kiosk - Redbox Coins New Sales Approach

Investors happy to see same-store sales growth rebounding for Coinstar. How they did it.

Full Story -- HEARD ON THE STREET: Redbox Coins New Approach to Sales - WSJ.com

Dual Kiosks

Coinstar says that when it adds a second machine to an existing location, it immediately includes the addition's revenue in same-store sales because it is part of an existing location. Coinstar says it has been upfront about this. Even so, it varies from the usual approach by retailers. Generally, when retailers expand a store's square footage by at least 15%, they take it out of the group from which same-store sales are calculated, according to Paul Lejuez, who covers specialty retailers but not Coinstar for Nomura Securities.

Full story HEARD ON THE STREET: Redbox Coins New Approach to Sales - WSJ.com

Industry Veteran Joins Public Media Works as President

Greg Waring, former executive with McDonald's Corporation and Redbox Automated Retail, has taken on the role as President and Chief Operating Officer of Public Media Works.

Industry Veteran Joins Public Media Works as President and Chief Operating Officer - MarketWatch

SAUSALITO, CA, Nov 23, 2010 (MARKETWIRE via COMTEX) -- Public Media Works, Inc. (PUBM 1.11, -0.14, -11.20%) and its wholly-owned subsidiary, EntertainmentXpress, Inc., announced today that Greg Waring, former executive with McDonald's Corporation and Redbox Automated Retail, has taken on the role as President and Chief Operating Officer of Public Media Works. Bill Zabit, who was serving as both Chief Marketing Officer and interim President, has stepped down as President and will continue his role as CMO with the company.

"I am pleased we have been able to shape the organization to achieve the market presence and visibility necessary to attract the attention and interest of veteran industry leaders like Greg Waring. I am delighted to be handing the torch to Greg and look forward to working with him," stated Zabit.

Waring has a 15-year background in all facets of new business development, marketing, and communications, combined with an extensive relationship network and market knowledge of Canada and the U.S. As Vice President and Chief Marketing Officer at Redbox, Waring was responsible for developing the initial consumer communications, branding and promotions for Redbox. He reported directly to the CEO and was a member of the executive leadership team of Redbox.

Waring led all marketing efforts during a period of extreme growth at Redbox where it went from 100 to 4500 locations and revenues of less than $3,000,000 to $100,000,000 in 30 months. Much of the work done by Waring is still in place at Redbox today.

Prior to working for Redbox, Waring held various leadership positions at McDonald's Restaurants of Canada and McDonald's Corporation over his 11 years of employment with the company. In his last role before joining the Redbox management team, Waring was a senior director and Director of Business Development, McDonald's Global Digital Innovation Group.

"I'm thrilled to be returning to the entertainment kiosk business with a company as innovative as Public Media Works. Our solution brings with it a number of exciting and creative features and I'm truly excited to begin introducing our kiosk solution to customers," Waring commented.

On the appointment, Garrett Cecchini, vice chairman commented, "As a company co-founder, I am thrilled to be topping off our management suite with a well-respected industry veteran. Greg Waring is a highly experienced executive with proven skill sets who was instrumental in creating the industry's leading company."

EntertainmentXpress, a division of Public Media Works, provides a convenient way for consumers to buy or rent movies, games and other entertainment media through kiosks located in quick-serve food locations, grocery stores and other high-traffic, public venues.

The company's business plan also includes an out-of-home advertising model with onboard 3D screens (no glasses required) in kiosks that provide its retail partners an opportunity to share in ad revenue as well as in DVD rental and sales revenue.

About Public Media Works

Public Media Works, Inc. (PUBM 1.11, -0.14, -11.20%) was founded as a forward-thinking entertainment company, created and operated by entertainment professionals, with the objective to discover, create, develop and distribute entertainment content to world audiences. The EntertainmentXpress subsidiary of Public Media Works is rolling out a network of conveniently located self-service kiosks which deliver demographically relevant digital media content to consumers. The company's core business model focuses on the high-volume rental and sale of DVD movies, video games and other media through kiosks located in quick-serve restaurants, grocery stores and other high-traffic, public venues. Features intended to differentiate EntertainmentXpress in the marketplace are expected to include a broader variety of digital product offerings over time, retail partner branded kiosks, a fully integrated solution for in-store advertising, and kiosks designed to be converted into media filling stations to a variety of digital storage devices.

This press release may contain forward-looking statements. Such forward-looking statements, particularly as related to the business plans of Public Media Works and its wholly owned subsidiary EntertainmentXpress, expectations of partnerships and strategic relationships, the rollout and deployment of DVD and video game rental kiosks and 3D LCD screens, the ability of EntertainmentXpress to enter into agreements with retail partners, to gain market share, the ability to purchase and place kiosks, the size of the market, and the ability of EntertainmentXpress to compete effectively in the marketplace, and the future opportunities of the company, are based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from the company's expectations and estimates. Public Media Works and EntertainmentXpress are trademarks of Public Media Works, Inc.

Public Media Works Corp Offices
2330 Marinship Way, Suite 300
Sausalito, CA 94965
Company Contact: 415.729.8000
www.publicmediaworks.com
For Investor Relations Contact
Jeffery Salzwedel
Salzwedel Financial Communication
503.722.7300

Industry Veteran Joins Public Media Works as President and Chief Operating Officer - MarketWatch

DVD Kiosks - Global Axcess to Acquire Tejas locations

PR/Investor spinup - Tejas with 250 units at 220 AAFES locations agrees to become part of Global Axcess which now has 600 locations. The pr "may" contain forward-looking statements.

PR-USA.net - Global Axcess Corp to Acquire Tejas Video With 260 DVD Kiosks

Global Axcess Corp (OTC Bulletin Board: GAXC; the "Company"), an independent provider of self-service kiosk solutions, today announced that it has signed a Definitive Agreement to acquire Tejas Video Partners ("Tejas"), a privately held firm operating in the unattended DVD rental kiosk business. Tejas currently has over 260 kiosk locations in operation across the United States, primarily at over 70 military facilities.

Global Axcess expects to close the acquisition by the end of November, which will result in an increase the Company's number of deployed DVD rental kiosks to over 600. Upon close of the acquisition, the Company's total DVD kiosk portfolio will be located at a combination of highly attractive grocery store chains and highly sought after locations on U.S. military bases. The Company believes the acquisition will be immediately accretive, adding over $1.0 million of EBITDA in 2011 and increasing revenues by over $4.0 million.

Tejas Video's primary contract is with The Army and Air Force Exchange Service ("AAFES") for DVD rental kiosks, which currently includes 250 kiosks deployed at 220 locations on over 70 bases. Tejas also has a contract with a small Texas-based convenience store chain for 10 additional DVD rental kiosks. AAFES currently operates facilities at over 100 domestic and 400 military bases abroad. AAFES operates facilities worldwide in more than 30 countries, five U.S. territories and 50 states. It operates approximately 181 main stores and more than 1,000 fast-food restaurants.

Mr. George McQuain, Chief Executive Officer of Global Axcess, indicated, "We are very excited about this combination – the addition of Tejas to our core business is substantial in not only the financial impact on day one, but also in helping us leverage what they have learned from being in the kiosk business for the past 6 years. Tejas is a stable business with an experienced management team that is generating positive EBITDA annually and has generated revenues of approximately $4.1 million in 2009. They have also demonstrated an ability to keep customers satisfied and committed to long term relationships. A clear indication of this was shown in Tejas recently defeating a major competitor for the renewal of the AAFES contract; AAFES elected to renew its initial five year contract with Tejas for another five years."

Von Shows, President of Tejas Video, stated, "This acquisition demonstrates a commitment by both companies to provide best-in-class service to existing and potential customers. Tejas has long-standing knowledge and expertise in the unattended DVD rental market; while Global Axcess brings financial strength, operational excellence and an established corporate infrastructure to assist in strategically building on what we have already begun to build with the U.S. military community. This combination is a win-win and I'm looking forward to assisting in future growth."

Marc Caramuta, Chief Operating Officer of Global Axcess noted, "Tejas Video has developed a highly efficient and effective operational platform in the DVD kiosk space, which can assist our already successful momentum into this space. We look forward to leveraging their team of talent and knowledge to affect positive results as we scale those efficiencies into a larger share of the DVD kiosk market – in the government sector as well as our growing footprint in the private sector."

Mr. McQuain concluded, "This acquisition will enable us to gain access to greatly expanded market opportunities, to rapidly deliver new DVD kiosk deployments, and to achieve synergies in our operations and knowledge base. We look forward to the success that this partnership will bring. We also look forward to the added value we are delivering to our shareholders."

Terms of the agreement, while currently undisclosed, include a cash payment at deal closing, an additional cash payment within 120 days after deal close and restricted shares of common stock. Terms also include an earn-out opportunity if certain performance milestones are achieved on additional kiosks deployed in locations currently without a DVD kiosk. The Company anticipates that it will fund the acquisition partly with its own cash and mostly through a facility with its senior lender, Fifth Third Bank. The future earn-out opportunities will be funded through the future operations of the Tejas business.

About Global Axcess Corp

Headquartered in Jacksonville, Florida, Global Axcess Corp was founded in 2001 with a mission to emerge as the leading independent provider of self-service kiosk services in the United States. The Company provides turnkey ATM and other self-service kiosk management solutions that include cash and inventory management, project and account management services. Global Axcess Corp currently owns, manages or operates more than 4,900 ATMs and other self-service kiosks in its national network spanning 43 states.

Investor Relations Contacts:
Sharon Jackson: 904-395-1149
[email protected]

Hayden IR:
Brett Maas or Jeff Stanlis: (646) 536-7331
[email protected] / [email protected]

This press release may contain forward-looking statements. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as: "believes," "expects," "may," "will," "should," or "anticipates," or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. Various important risks and uncertainties may cause the Company's actual results to differ materially from the results indicated by these forward-looking statements. For a list and description of the risks and uncertainties the Company faces, please refer to Part I, Item 1 of the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 3, 2010, and other filings that have been filed with the Securities and Exchange Commission. The Company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, and such statements are current only as of the date they are made.

SOURCE Global Axcess Corp

PR-USA.net - Global Axcess Corp to Acquire Tejas Video With 260 DVD Kiosks

DVD Kiosk - Entangled in red tape, Redbox eyes Internet with longing

Nice article on communities beginning to set design standards for how big/what color and where self-service vending machines can be reasonably located.

Entangled in red tape, Redbox eyes Internet with longing

Redbox has rented more than a billion DVDs out of its cute red kiosks; at a buck apiece, why not pick one up on your way out of the grocery store? But Redbox, like Netflix, has seen the future, and it is movies delivered digitally, right over the Internet. The company recently laid out its plans for Internet delivery.

Digital delivery is more convenient than even the most convenient of kiosks, of course. The selection can be nearly infinite, rather than limited to whatever can fit inside the little red box. And of course you don't need to buy all those little red boxes, work out revenue-sharing deals with partners, and deal with city zoning officials.

"What's that?" you say. "Who could possibly care if a store sticks a Redbox next to its front door?"

The city of Wheaton, Illinois, for one. Many of us at Ars live in Chicago, city of broad shoulders, where this week, the local stories included Wheaton's push to regulate both the size and location of Redbox kiosks in town.

This certainly sounded odd, so we dug into the city archives of Wheaton, a wealthy suburb to the west of Chicago, and we were reminded again of just how important a permission-less Internet has been to the huge wave of innovation that has crashed through the tech sector over the last 15 years.

Let's regulate

At two sparsely attended meetings of the Wheaton Planning and Zoning Board this summer and fall, the members of the Board decided that something should be done about the Red Menace. But was there a menace? Redbox has only a few kiosks scattered throughout the 70,000-strong city of Wheaton (the company's online map shows three), mostly notably outside a major Jewel grocery store, where they are illuminated and have plenty of space.

Despite this, a city planning official, appearing before the Board, expressed her worry that the machines would "start to appear in less than desirable locations throughout the city," since more inquiries about installing machines had been made to City Hall. (Note that Wheaton is a city that doesn't allow soda vending machines outside of stores, and the Zoning Board spent much of this meeting thinking of ways to rein in clothing and book donation boxes in parking lots. There are... lots of rules.)

"I worry about congestion at the doorways," said one member of the Board. "I worry about the look and the precedent," said another. "We don't want a 200 foot super-DVD vending machine or anything like that," added another.

Some sort of regulation was needed here, they agreed, though one member had to draw the line when a suggestion was made that the machines must be shut down whenever a business closed. ("You're killing the convenience!" someone finally said.)

So a proposed ordinance was drawn up to limit "DVD vending machines." At the second meeting on the issue, the youngest member of the Board raised an obvious objection: "Last christmas I got a Blu-ray player. It might be worth adding that to the language because it might be the next thing or something."

He was told by an older gentleman on the Board that the term "DVD" covered everything, "Blu-ray" being simply a subset of the category.

So, after a city planning official trekked out to Jewel and measured the size of the existing machine, the city drew up a new ordinance on October 18. It says:

"Not more than one DVD vending machine per public entrance at grocery, convenience food store, department or drug store provided they are placed adjacent to the building, do not reduce the width of paved clear space for the passage of pedestrians to less than five (5) feet, and are not located within five (5) feet of the Fire Department connection. A maximum depth of three (3) feet, width of six (6) feet and height of eight (8) feet are permitted for the combined machine and surround."

If you want to put a machine outside your restaurant, coffee shop, or bookstore, you get to ask permission. If you'd like to file a variance request and sit through some Zoning Board meetings, you might get approval. The Board did consider the idea of requiring permits to install the kiosks, but eventually relented.

Entangled in red tape, Redbox eyes Internet with longing

DVD Kiosks Try Feature Pricing

Universal to begin test charging more than $1 per night for DVD kiosk rentals

Universal to begin test charging more than $1 per night for DVD kiosk rentals | Company Town | Los Angeles Times

Universal Pictures is putting the first crack in the wall of $1-per-night rentals of DVDs from kiosks.

The studio has signed a deal with NCR Corp., which operates nearly 7,000 kiosks under the Blockbuster Express name, that includes the first test of "premium" prices for select DVDs the same day they go on sale.

Universal is testing the waters to find out whether consumers would be willing to pay more for newly released DVDs rather than wait nearly a month to rent at a lower cost. If they are, it would alleviate studios' concerns that $1-per-night rentals undercut revenue by attracting consumers who might otherwise pay more to watch the DVD sooner.

Most other DVDs from Universal will still be available to rent for $1 per night 28 days after they first go on sale. It's the same "window" that Universal, 20th Century Fox and Warner Bros. have instituted on NCR's larger competitor, Redbox. They did so in an effort to boost DVD sales and video-on-demand rentals, believing that $1-per-night rentals of newly released DVDs would eat into sales, where profit margins are greater.

As part of their deal, Universal and NCR have agreed to test charging more for certain titles in a small number of kiosks during the first 28 days. Under the tests, NCR is expected to charge a higher price, possibly $3, for the first night and a lower price, such as $2, for subsequent nights.

Then, after 28 days, those discs will revert to the standard $1-per-night price.

"Our agreement to test premium day-and-date offers and new DVD sales will help us identify new outlets for our movies while giving our customers the flexibility and choice they want in their entertainment purchases," Universal Home Entertainment President Craig Kornblau said in a statement.

It's the first time a major DVD kiosk rental company has charged more than $1 per night during a so-called premium window. Redbox charges $1.50 per night for high-definition Blu-ray discs and has tested going as high as $1.25 per night for standard DVDs.

The tests are expected to start soon, though an NCR spokesman declined to identify which movies would be tested and in what markets.

-- Ben Fritz

Universal to begin test charging more than $1 per night for DVD kiosk rentals | Company Town | Los Angeles Times

Flextronics Plant in North Carolina Tour

Building Redbox units in NC and how Flextronics plant does it.

source link

Flextronics plant uses Lean manufacturing to produce redbox kiosks

Burney Simpson editor
• 22 Sep 2010

Every one. Every single one.

International manufacturer Flextronics this May joined with its customer Coinstar to announce its manufacturing plant in Creedmoor, N.C., had built and shipped 25,000 redbox kiosks to locations all over North America. Since then the plant has built and shipped a couple of thousand more of the devices that had a hand in changing the way consumers obtained, paid for and returned movies and video games. And right around Labor Day redbox reported it had rented its 1 billionth DVD.

Most folks passing the Flextronics plant on Interstate 85 on the way to Raleigh-Durham International Airport probably don’t think twice about it, other than notice its size, nearly 300,000 square feet. It’s just off an unremarkable exit with gas stations, fast food joints and mini-malls.

But since 2005 the plant has been focused on building one redbox unit at a time with a single-minded devotion. The 250 employees led by general manager John Mainey use the Six Sigma Lean manufacturing techniques designed to cut waste, reduce excess effort, address defects and keep the assembly line moving. (A slide show of the plant is available.)

Mainey describes himself as a true believer in the Lean method.

He contends that American manufacturing declined as firms compared production costs in the United States with production costs in locales like China and Mexico, couldn’t see how to reduce spending — much of it related to labor — threw up their hands and said, ‘We’ll just send it overseas.’

Instead, manufacturers need to “apply Lean and eliminate waste. Recognize that labor is just one cost, and that they must be flexible. If we can do this, then manufacturing will stay here in the U.S.,” said Mainey.

The Creedmoor plant is one small part of Flextronics, a massive Electronics Manufacturing Services (EMS) firm based in Singapore with 160,000 employees in 30 countries. It generated more than $24 billion in revenues in fiscal 2010 from its work in five major divisions — computing, industrial, infrastructure, medical and mobile & consumer. Redbox and other self-service products fall under the industrial division.

In self-service, Flextronics offers hardware, software and industrial design; electrical and mechanical engineering; prototyping and manufacturing; logistics, support, and repair and refurbishment services. It has partnerships in financial bill pay, municipalities, retail, digital photo, ticketing, healthcare and advertising.

At Creedmoor, the production of each redbox is an exercise in reducing waste. The well-known box itself and much of the internal parts come from suppliers in the Raleigh-Durham metro area. The box comes painted its trademark red for most retail outlets and a royal blue for Walmart Stores.

Like many large-scale manufacturers, Creedmoor has adopted assembly practices developed in Japan. It uses the well-known ‘Just in Time’ approach to parts supply, along with Kanban, a ticketing method that tracks each part, from the box itself to every one-quarter inch screw, to better control flow. If you have one too few or one too many, you know you have a problem.

Parts come with a minimum of wrapping and boxing because “we would just have to unwrap it and throw it out anyway,” said Earnest Steinhoff, manager of operational excellence at the plant.

Creedmoor has its own language and lingo. The creation of the kiosk starts as a worker, dubbed a ‘water spider,’ visits the ‘supermarket’ of parts to be used, says Steinhoff. The spider goes ‘shopping’ to gather the parts and puts them on a cart for assembly.

rest of article and slideshowk

Opinion - Blockbuster Express Kiosk: Can It Beat Red Box?

Opinion off tech site on odds of Blockbuster being able to knock off (or dent) Redbox. This coming after 3-for-$2 rental gambit over Labor Day.

Editors Note: The fellow here should note that it is not Blockbuster going after sales/revenue. They are just the namebrand that NCR licensed for recognition/acceptance. Packard Bell doesn't make TV sets either...Also worth nothing that there is always room for #2

With Labor Day weekend nearly over, you may have seen deals coming from the few available Blockbuster kiosks around your city. These include 3 DVD rentals for $2, a rather low number for any rental agency, following other deals that ranged in the 2-for-$1 area.

You might be thinking “Hey, that is a fantastic deal,” but you could be missing the big picture: Blockbuster is grasping at straws. They have already died as a mainstream rental store, along with companies like Hollywood and mom and pop shops. Now they are doing a crash and burn with kiosks, as well.

The thing is, not everyone like viewing things online or through devices. This means that while Netflix has the bulk share of revenue, they won’t catch it all. The slack has been picked up by convenient Red Box kiosks, which allow you to rent from a kind of electronic vending machine.

Blockbuster seems to be hoping to jump back into the game as a competitor for Red Box, but they don’t even have the revenue to expand. In the meantime, that market has already been so largely covered that it could be hard for them to gain a foothold.

Blockbuster Express Kiosk: Can It Beat Red Box?

Editors Note: The fellow here should note that it is not Blockbuster going after sales/revenue. They are just the namebrand that NCR licensed for recognition/acceptance. Packard Bell doesn't make TV sets either...Also worth nothing that there is always room for #2

Are the days of the $1 DVD rental kiosks numbered?

Analysts at J.P. Morgan apparently think so, saying ongoing growth of kiosk vending, spearheaded by Redbox and Blockbuster Express, among others, will soon be undercut by burgeoning growth of streaming and video-on-demand (VOD)

Report: DVD Rental Kiosks to Decline in 2012 | homemediamagazine.com

By : Erik Gruenwedel | Posted: 09 Sep 2010
[email protected]

Indeed, VOD, which has been little more than an afterthought for the past 20 years, is lately getting the significant support from major studios, cable and satellite operators, and related consumer electronics manufacturers and retailers.

Major retailers Walmart, Best Buy and Sears, in addition to Amazon, Blockbuster and Apple, have launched or expanded VOD services. Netflix, which has created considerable buzz for its streaming service, is launching a standalone streaming service in Canada this fall. Amazon is reportedly set to bow its own subscription-based streaming service in the fall as well.

Studios see VOD as a margin-accretive alternative to DVD/Blu-ray Disc rentals, in addition to replacement revenue for declining package media sales.

“We believe adoption of online video streaming and downloading services will accelerate dramatically in 2011 … and be promoted by major retailers,” J.P. Morgan analysts wrote in the August report. “DVD kiosk revenue opportunity [as a result] will peak in 2011, owing to loss of share of the home entertainment market to the online video services.”

Dan Rayburn, principal analyst with Frost & Sullivan, said Coinstar-owned Redbox is vulnerable to an influx in digital distribution, including streaming, because their current business model revolves around packaged media.

“They have no digital offering. … They are in a hard spot,” Rayburn told KioskMarketplace.com, alluding to the fact Redbox cannot deliver content directly to the television.

Coinstar, of course, is working to develop digital distribution that could involve both its kiosks and the Internet.

rest of article

Coinstar Day of Reckoning

Good writeup on selfservice world on day of reckoning for Coinstar -- “DVD kiosk growth opportunity peaks in 2011 and that kiosk rental starts to decline in 2012.”

Coinstar’s redbox could soon face day of reckoning: Analyst | SelfServiceWorld | Self Service World

A recent analyst report from a large investment house challenges the prospects for Coinstar and its highly successful redbox DVD-rental kiosk unit, and calls into question the business model for the devices.

Equity analysts from J.P. Morgan in late August trimmed their 2011 and 2012 earning-per-share estimates for the Bellevue, Wash.-based Coinstar, predicting that “DVD kiosk growth opportunity peaks in 2011 and that kiosk rental starts to decline in 2012.”

The reason? Competitors of various stripes will increasingly offer streaming video or video on demand (VOD) through either the Internet or another device in the consumer’s home, according to the analysts. This will be so convenient and inexpensive, goes the argument, consumers will stop visiting the neighborhood redbox.

“We believe adoption of online video streaming and downloading services will accelerate dramatically in 2011 … and be promoted by major retailers including Walmart, Best Buy, Sears and Blockbuster,” write the Morgan analysts. As a result, “DVD kiosk revenue opportunity will peak in 2011 owing to loss of share of the home entertainment market to the online video services.”

This finding isn’t new. Bloggers and industry followers seem to believe the wide-scale launch and acceptance of VOD is inevitable. Coinstar itself acknowledges the inevitable with president and COO Gregg Kaplan declaring that his company is preparing its strategy to get in the streaming game. Kaplan has said that his firm may reveal details of that plan during its third quarter earnings call with analysts but until then it is keeping quiet. A Coinstar spokesperson declined to comment.

story continues below...

Coinstar’s redbox could soon face day of reckoning: Analyst | SelfServiceWorld | Self Service World

MOD Systems Receives More Funding

MOD Systems Inks $6M Series B, Surviving Controversy Surrounding Indictment of Co-Founder Mark Phillips

MOD Systems Inks $6M Series B, Surviving Controversy Surrounding Indictment of Co-Founder Mark Phillips | Xconomy

Seattle-based MOD Systems, a developer of digital-media delivery systems, has had a rocky couple of years, but now it has found a new lifeline in the form of a $6 million investment.

The company, which develops technologies that allow consumers to purchase digital movies, TV shows, and music, and load them onto SD cards portably through touch-screen kiosks, raised an impressive $35 million Series A in September 2008, led by Toshiba, NCR, Deluxe Entertainment Services, and private investors. But the company drew less glowing attention after its co-founder and then CEO Mark E. Phillips was sued by an investor for fraud, embezzlement, misrepresentation, and breach of fiduciary duty in February 2009.

However, despite the public and drawn-out case—resulting in Phillips being charged in a federal wire fraud case in March—the company has found a way to regain confidence of investors, through a $6 million Series B round being announced today.

“When we raised money two years ago, the purpose of that money was to do what we’re doing now—relaunch the company and implement the technology we’re doing now,” says MOD co-founder, chairman, and chief executive Anthony Bay.

The new round of financing is being used to deploy the company’s digital entertainment download kiosks in the market. MOD’s first commercial customer, InMotion Entertainment, rolled out around 20 of the 57 kiosks it will deploy at InMotion stores in airports nationwide—including SeaTac International Airport, which was the first to host a kiosk—two months ago. Bay says the company expects to install the rest before the end of the year.

MOD chose airports as the first locations to host kiosks because of the large market for travelers who are looking for entertainment while they’re traveling by plane. Through one of these kiosk systems, consumers will be able to browse, rent, or purchase digital movies and TV shows, and load them onto an SD card (or purchase one on the spot) before boarding a flight.

“This is the first real commercial deployment of major studio content through kiosks,” Bay says. “With movies and television shows, the studios are very, very picky about content protection. SD cards are the only format that allow you to protect the content on the card—SD cards are standard secured digital. Using SD cards, we can protect the movie or the TV show, and then essentially either make it permanent use so you can keep it, or you can rent it, so you have 48 hours to watch it.” This capability means the studios don’t have to worry about content protection, and consumers still have the ability to watch a movie or TV show streaming right from their computer, without an Internet connection.

“There’s a lot of buzz about the world moving to digital content distribution. Most companies are focused on content delivery system to the home. MOD is focused on content delivery outside …NEXT PAGE »

Thea Chard is the Assistant Editor for Xconomy Seattle. You can e-mail her at [email protected] or follow her on Twitter at http://twitter.com/theachard.

Opinion - Redbox or rental stores?

From Daily Iowan 2-part opinion piece on how Redbox is another Wal-Mart destroying conventional retail. Then, why it works as opposed to Blockbuster. Surprised to see title of piece prefaced with Bitch, Please. It got our attention it must be admitted.

Bitch, Please: Redbox or rental stores? - The Daily Iowan

Rental stores with personality, please

There are many reasons why I don't like the Redbox kiosks. First is the weak selection of movies. Redbox keeps the titles to basically new and recently released movies. If you want to watch an older or a foreign film, you're out of luck.

Second, there's something robotic about the idea of vending machines in general. But you don't need someone to tell you about a Coca-Cola. The taste and color have always been the same, more or less.

There's a reason movie-rental stores still exist. People like people. Although a person can buy a product off of the Internet, some still go into stores, where a person is there to help you. No one would buy from a store that has products but no customer service. What happens if you can't find the title you want? What if you don't know the name of the movie, just the main actor or theme?

Third, I believe that these kiosks can have a damaging effect on the movie-rental industry. I'm a former employee of Blockbuster, and I know the importance of the salesperson. There's no one there to ask questions about the movies, no one to check if the disc is in good condition, and no one to make suggestions about what movies to watch.

These people aren't experts on movies, but they do know more and watch more movies than the average person. If all people got their movies from kiosks, the jobs at rental stores would vanish.

Online rentals have already damaged the stores. The possible effect of these kiosks are the same with building Wal-Marts in small towns, except on a smaller scale.

This is the same Western idea of limiting your overhead so you can make more money. How are you supposed to be able to compete? There's only so much you can do with a 7-foot tall red kiosk.

These limiting factors, and the complete lack of human presence, make for a poor rental experience.

— by Jason M. Larson

Redbox busts up Blockbuster

Redbox is taking over the planet. Every time someone uses Redbox, another Redbox will sprout up within a 20-foot radius. It's the Starbucks of movie renting, which means global dominance is in Redbox's near future. Ask people walking out of a Kum & Go where they rent their movies, and they'll all say the same thing.

"Redbox is available pretty much everywhere, and it's only $1 for a movie," UI student and Redbox patron Tom Burdakin said. "That combination makes it an obvious choice over the competition."

The first reason Redbox is a no-brainer is its availability. You can rent All Dogs Go to Heaven 2 from a Redbox in Spain, and you can return it the next day in Idaho, depending on your flight schedule.

That's the beauty of Redbox — it doesn't matter which location you return it to. Blockbuster cannot say the same.

Also, Redbox is never closed. Because Redbox does not abide by society's rules and time zones, it's always available for you when you need it. Before the Redbox era, I can't count how many hot high-school dates I had to cancel on account of the lack of open video stores, which really killed my game plan of rounding first base during the torture scenes in Saw.

The biggest reason Redbox is the clear winner over rental stores is all about the Benjamins. Redbox is $1 for one night, plain and simple. Blockbuster is $5 for five nights. Mathematically, the two are even. But maybe I don't want a movie for five nights. Maybe I just want to rent Remember the Titans for Friday night to mentally prepare myself for tailgating season, which begins Saturday.

It honestly takes five late days at Redbox to equal one rental payment at Blockbuster. It just doesn't make any sense, and Burdakin agrees.

"Blockbuster is way too expensive," Burdakin said. "Then you get the all the stupid late fees, and the fact that I have to drive all the way over to the store to return the movie is such a complete hassle."

There's also a little known secret among the Redbox community that gives another advantage over the evil Blockbuster. On every Redbox menu is a "code" section that allows you to enter a code and receive a free DVD.

A FREE DVD.

All you do is go to the Redbox website and sign up for the free codes.

Redbox gets you in this attention deficit generation we live in today. Quick, easy, and cheap.

— by Evan Clark

Bitch, Please: Redbox or rental stores? - The Daily Iowan

It's Official -- Bye Bye Blockbuster

With Netflix and Redbox/Coinstar aggressively expanding, nothing left for Blockbuster except the Packard Bell gambit (ie trade its name and no longer make product)..NCR is seen as potential beneficiary in all this adding a twist.

The slogan used to be "Make it a Blockbuster night." Now the slogan appears to be "Make it a bankruptcy month."

Home video rental chain Blockbuster told Hollywood studios earlier in the month that it plans to file for bankruptcy in September, coming after dominating the the video rental business for more than a decade.

Blockbuster could no longer compete with companies like Netflix (NASDAQ: NFLX) and Redbox, a subsidiary of Cointstar (NASDAQ: CSTR).

It met with six major studios last month in Hollywood, according to a source, and said the company would file a "pre-packaged" bankruptcy.

Blockbuster hopes that during the Chapter process that it will be able to restructure its debt, currently at $1 billion, as well as get out of leases on at least 500 of its 3,425 stores in the United States.

If the company can continue receiving the support of Hollywood's film studios during the bankruptcy, this will be a major coup for Blockbuster, so that it can continue receiving new DVDs.

Since the beginning of 2008, Blockbuster has struggled mightily, losing $1.1 billion. The company hasn't been able to grow the business due to the massive interest payments on its $920 million worth of debt.

Rest of story

NCR at Kiosk Crossroads?

NCR target of 10,000 getting close to completing. Questions on what investment in DVD market comes after those 10,000 being asked now. Last week Camara stepped down and was replaced. Portable formats in retail channels.

y : Erik Gruenwedel | Posted: 28 Jul 2010
[email protected]

With nearly two-thirds of its planned 10,000 Blockbuster Express rental kiosks allocated, NCR Corp. appears uncertain whether to increase the install base or focus on alternative distribution channels for home entertainment.

Duluth, Ga.-based NCR is funding the rollout and fulfillment (acquisition of DVD titles) for Express kiosks through a license deal with Dallas-based Blockbuster.

During a financial call with investors last week, CEO Bill Nuti said he would not look beyond implementation of the remaining 3,500 Express kiosks nationwide as to whether the company would increase its involvement in DVD rental kiosks or related entertainment.

“The hurdle rates get higher over time from our perspective because we do feel strongly that other channels to market going forward might be better investments for the company,” Nuti said. “But we’re not going to make that determination until we get towards the end this year. Right now, we’ve got to get 10,000 done and 10,000 put in the right places.”

Indeed, NCR is deploying 100 to 200 Express kiosks on a weekly basis, with an emphasis on retail location rather than market penetration. Industry leader Redbox has deployed more than 22,000 kiosks with plans to deploy another 3,000 units.

“If we wanted to, we could ramp up faster, but right now it’s about making smart choices on deployment,” Nuti said.

In the quarter, NCR rolled out Express kiosks — many replacing non-renewed Redbox units — at more than 300 Kwik Trip convenience stores in the Midwest, 105 Tom Thumb and Randalls locations in Texas, 80 Xtra Mart stores in the Northeast and 100 Mapco Express locations in the South.

NCR said it expects to generate pre-tax earnings (EBITDA) on Express kiosks by the fourth quarter, in addition to $25 million to $35 million EBITDA in 2011.

Nuti said he expects negotiations with studios regarding revenue-sharing agreements to conclude this summer, and would likely not preclude 28-day delays (windows).
CFO Bob Fishman said distribution agreements with studios involve more than windows, including factoring in technology costs and sellthrough initiatives such as downloads.

“We are looking at the total automated retail offering in the industry, and what does a retail store look like in the future versus what does it look like today?” Fishman said. “That’s why it includes more than just rental.”

Specifically, NCR is exploring expanding distribution of digital content via streaming, a channel currently controlled by Netflix, with Redbox eyeing a streaming initiative in the fourth quarter. The company said it would likely commence alternative distribution channels (including securing content digital rights) through the Blockbuster brand.

“We’re looking at the core investments of what it is we need to do to deliver it into a portable format,” said EVP John Bruno. “Then we will make investments as we see the market unfold. We see that’s going to be a market that’s going to continue to grow and have pretty deep technical demands.”

Nuti said he expects Express kiosks would continue should Blockbuster file for bankruptcy, saying NCR would maintain its business strategy with whoever emerged as holder of Blockbuster’s assets.

The executives’ comments were made before this week’s departure of Alex Camara, SVP and GM of NCR Entertainment.

Edward Woo, analyst with Wedbush Morgan Securities in Los Angeles, said apprehensive comments from NCR executives regarding the DVD kiosk business have been ongoing.

“Replacing their entertainment division head indicates they are not bullish (like Redbox), and it may be a signal that they are going to significantly slow down DVD investment in 2011,” Woo said.

Full article

Redbox Adds Blu-Ray and Game Rentals to some markets

Redbox adds Blu-Ray and games rentals to rental kiosks in some markets. By fall all kiosks will get Blu-ray. 23,000 kiosks at last count.

Many Blockbuster locations have gone out of business with the firm closing one in five of its rental locations. While traditional movie rental stores like Blockbuster appear to be on the way out, Redbox and its kiosk business is growing and looking to expand.

Redbox added game rentals in some markets and is now adding Blu-ray rentals to the mix. Redbox announced this week that it is putting Blu-ray titles into 13,300 of its kiosks across the country. The Blu-ray titles will rent for $1.50 per night compared to the $1 per night a standard DVD rents for. Redbox plans to have Blu-ray films in all of its 23,000 kiosks by this fall.

"Offering Blu-ray rentals is an exciting opportunity for redbox to expand our product offerings and build on the relationships that we've established with millions of consumers nationwide," said Mitch Lowe, president, redbox. "Redbox is a convenient, affordable home entertainment provider and we're delighted to offer consumers their favorite movies on the increasingly popular Blu-ray Disc format."

DailyTech - Redbox Stuffs Kiosks with Blu-ray Flicks in Some Markets

People - NCR Names New Head of Entertainment

NCR names Justin Hotard VP of Entertainment replacing Alex Camara (ex-Coinstar). Hotard was "instrumental" in acquisitions of TNR and DVDPlay as well as investment in Mod Systems. Metric worth noting to date NCR has installed 6,500 kiosks.

NCR Names New Head of Entertainment | homemediamagazine.com

By : Erik Gruenwedel | Posted: 27 Jul 2010
[email protected]

NCR Corp. July 27 named Justin Hotard VP and GM of NCR Entertainment, replacing Alex Camara, who left the company for undisclosed reasons.

Camara, who joined NCR June 1, 2009, had been SVP and GM of Coinstar Inc.’s entertainment unit, which included industry leader Redbox.

Duluth, Ga.-based NCR is rolling out 10,000 Blockbuster Express kiosks nationwide this year through a license agreement with Dallas-based Blockbuster. To date, NCR has installed 6,500 kiosks, including most recently units in 500 QuikTrip convenience stores located across the following nine states: Arizona, Illinois, Iowa, Georgia, Kansas, Missouri, Nebraska, Oklahoma and Texas.

Together with Redbox, the two companies dominate the burgeoning DVD kiosk vending market. Indeed, kiosk vending is projected to generate more than 30% of rental revenue this year, according to The NPD Group.

Hotard, who rejoins NCR Entertainment after serving as VP of business development, was instrumental in establishing the company’s kiosk business, including acquisitions of kiosk vendors TNR and DVDPlay, and investment in MOD Systems. He also served as the first GM of NCR Entertainment.

“Justin has amassed a great deal of relevant experience while establishing comprehensive relationships within the company and the industry, making him ideally suited to lead our Entertainment business now and into the future,” said John Bruno, EVP of NCR, in a statement.

Blockbuster Express DVD kiosks come to QuikTrip

Today NCR announced it will deploy BLOCKBUSTER Express kiosks in nearly all 555 QuikTrip convenience stores in nine states: Arizona, Illinois, Iowa, Georgia, Kansas, Missouri, Nebraska, Oklahoma, and Texas.

Consumers can conveniently rent their new release and classic DVDs online at BlockbusterExpress.com and return the DVD to any BLOCKBUSTER Express kiosk -- not just the location where they rented the DVD.

"QuikTrip stores take pride in offering customers immediate access to quality and economical products in a convenient environment," said Mike Thornbrugh, with QuikTrip. "We strive to offer relevant services and products to fit our customer's needs. NCR's BLOCKBUSTER Express-branded kiosks proved to be a perfect addition to our service offerings and enable us to add entertainment to the list of items we offer to our customers and their families."

"NCR's BLOCKBUSTER Express-branded kiosks are bringing efficiency, ease of use and entertainment to consumers," said Alex Camara, vice president and general manager of NCR Entertainment. "Our DVD-rental kiosk deployments continue to rise as c-stores such as QuikTrip realize the added value they can bring to customers while they make their purchases. By partnering with NCR, QuikTrip is providing customers the ease of one-stop shopping for all of their needs."

NCR operates the highest-capacity DVD-rental kiosk in the industry, with the capability to hold more than 900 DVDs each. For a full list of titles available at BLOCKBUSTER Express kiosks, visit www.blockbusterexpress.com. Consumers can also rent a DVD online from BLOCKBUSTERExpress.com.

For more information about QuikTrip, visit http://www.quiktrip.com.

About NCR Corporation

NCR Corporation (NCR 12.25, +0.05, +0.41%) is a global technology company leading how the world connects, interacts and transacts with business. NCR's assisted- and self-service solutions and comprehensive support services address the needs of retail, financial, travel, healthcare, hospitality, entertainment, gaming and public sector organizations in more than 100 countries. NCR (www.ncr.com) is headquartered in Duluth, Georgia.

NCR is a trademark of NCR Corporation in the United States and other countries.

SOURCE: NCR Corporation

NCR Corporation
Jeff Dudash, 919-435-6976
[email protected]

NCR Deploying More Than 500 BLOCKBUSTER Express-branded Kiosks at QuikTrip Convenience Stores - MarketWatch

NCR Corp. inks kiosk deal with Kwik Trip Read more: NCR Corp. inks kiosk deal with Kwik Trip - Atlanta Business Chronicle:

NCR Corp. will add more than 300 Blockbuster Express kiosks in Kwik Trip convenience stores throughout Iowa, Minnesota and Wisconsin.

The machines allow consumers DVD rentals for $1 a night through. No membership is necessary and the kiosks hold up to 900 DVDs. Customers swipe their credit card and are charged $1 a night until they return the DVD. And they can return the DVD to any Blockbuster Express kiosk, not just where they rented the DVD.

Duluth, Ga.-based NCR Corp. (NYSE: NCR) recently added Blockbuster kiosks at Xtra Mart, Sheetz, Basha’s Family of Stores, Duane Reade and Brookshire Grocery.

Read more: NCR Corp. inks kiosk deal with Kwik Trip - Atlanta Business Chronicle:

Read more: NCR Corp. inks kiosk deal with Kwik Trip - Atlanta Business Chronicle:

NCR Corp. inks kiosk deal with Kwik Trip - Atlanta Business Chronicle:

Closing credits to roll for Hollywood Video

Hollywood Video plans to close its stores nationwide, including three in the Roanoke and New River valleys. Personnel at the chain's Roanoke area locations are telling customers that stores will close next month, with liquidations imminent.

Closing credits to roll for Hollywood Video - Roanoke.com

Movie Gallery, the parent company of Hollywood Video, plans to shutter its stores and liquidate its assets, according to a filing last week in the U.S. Bankruptcy Court of the Eastern District of Virginia in Richmond, stating that the company defaulted on a loan.

Movie Gallery did not respond to media inquiries Monday.

The closings come after the Oregon-based chain filed for Chapter 11 bankruptcy in February. Movie Gallery owns stores under the brands Game Crazy, Hollywood Video and Movie Gallery.

The challenges of a competitive movie rental field are mounting for Movie Gallery and other rental chains. The rise of $1-a-day DVD kiosks and the success of the mail-order company Netflix are the industry's major competitors, said Jan Saxton, vice president and senior film analyst at Adams Media Research in California.

Nationally, the number of video rental stores peaked at 70,000 in 1989, while in 2003, DVD rental retailers totaled 27,000, Saxton said. His firm's 2009 research reveals a meager 14,000 movie rental stores nationwide.

Ahead of Hollywood Video, all Blockbuster stores in the Roanoke and New River valleys closed several months ago, after the franchise owner of these outlets filed for bankruptcy.

Still, a regional movie rental chain remains. Movie Starz Video, headquartered on Mountain Avenue in Southwest Roanoke, has 30 stores in Virginia, Tennessee and West Virginia. Recently, the company began offering 99-cent rentals, per day, for newer movies. It is a direct response to the proliferation of $1 rental kiosks, said Mark Tozier, president of Movie Starz.

The company also is eyeing soon-to-close Hollywood Video and Movie Gallery locations for new stores, Tozier said.

"Our biggest challenge is getting people to understand there is a difference between a full service video store and a kiosk, and it's not just the price ... it's about one-on-one service," he said.

It's not a secret that DVD rental kiosks are sprouting rapidly in the Roanoke and New River valleys. Blockbuster Express kiosks, Blockbuster's version of $1-a-day DVD rentals, landed in at least seven Sheetz and other convenience stores.

Redbox, another $1 kiosk rental concept, has 29 red machines at Kroger, Walgreens, Walmart, Food Lion and 7-Eleven stores.

Also, Netflix maintains a quiet presence in the Roanoke Valley, where it opened a distribution center in 2008. It is one of the company's 58 distribution centers nationwide, but Netflix spokesman, Steve Swasey, would not disclose its exact location.

News researcher Belinda Harris contributed to this report.

Where'd all the movie rental houses go?

Finally the newspapers have someone else to write sad stories about being now obsolete...
...Once a staple, brick-and-mortar video rental stores fall victim to kiosks and subscriber services...Once we used to read printed newspapers too....

Where'd all the movie rental houses go? - sbj.net - Springfield Business Journal Online - Springfield, MO

Once a staple, brick-and-mortar video rental stores fall victim to kiosks and subscriber services
Chris Wrinkle
Reporter

Recent closings of at least three video rental stores in Springfield illustrate questions the industry faces.

The casualties include a Blockbuster at 1839 E. Independence St., which closed Feb. 28, and two Movie Gallery stores, one at 1380 E. Republic Road that closed in late March and another at 2127 W. Republic Road, which is currently liquidating inventory.

Studies indicate that a reason for the demise of brick-and-mortar video stores is the movie-rental kiosks that are popping up like spring flowers on store parking lots.

“The rise of both Netflix and Redbox have sounded a death knell for the traditional brick-and-mortar video rental store,” said Mark Biggs, chairman of the Missouri State University media, journalism and film department, via e-mail.

An August 2009 study by market research company NPD Group said that while traditional store rentals still account for the greatest share of video rentals among U.S. consumers, kiosk rentals are growing at a greater rate than store rentals and even subscription services.

Bankruptcy bound
Movie Gallery Inc. operated eight stores in the Springfield area before the Wilsonville, Ore.-based company filed for Chapter 11 bankruptcy protection Feb. 2, according to www.moviegallery.com. The court-ordered reorganization plan is to liquidate and close 760 U.S. stores, the company said in a news release.

Following the closings, the company will operate 1,906 stores, including 1,111 Movie Gallery, 545 Hollywood Video and 250 Game Crazy locations. Additional stores likely would close during the Chapter 11 process, the release said.

Attempts to reach Movie Gallery Inc. for comment were unsuccessful but locally, staff at the West Republic Road store confirmed that the store is set to close, though no date has been announced.

Similar plans have been rumored for Blockbuster Inc. since 2009. Blockbuster closed 253 stores nationwide in January and has plans to close another 150 stores by April.

But Skip Phillips, Blockbuster district manager in Springfield, said the three remaining Blockbuster stores in town – 321 E. Battlefield Road, 1011 S. Glenstone Ave. and 1007 E. Kearney St. – are performing well.

“They’d be closed if they weren’t profitable,” said Phillips, whose employer, Fort Worth, Texas-based Midwest Entertainment Inc., holds the Blockbuster franchise rights in Springfield. “We’re locally owned and operated, so we don’t do the same things that corporate does.”

Streaming subscriptions
Statistics show consumer attention is turning to movie subscription services, most notably Netflix. The Los Gatos, Calif.-based company delivers movies by mail or streaming to computers, DVRs and Blueray players and gained 3 million subscribers last year to 12.3 million, according to www.netflix.com.

“Netflix changed the way America watched movies … with the subscription service launched in 1999,” said Steve Swasey, Netflix vice president of corporate communications.

Wall Street is in agreement with consumers thus far. Netflix stock (Nasdaq: NFLX) last week recorded a 52-week high of $89.10, and shares have gained 25 percent the past month, according to TheStreet.com. 2009 revenues grew 23 percent to $1.67 billion, according to federal filings.

Swasey said streaming movies are the way of the future.

“We’ve got a Ferrari going at full speed, we’re just going to tinker with the engine and change the tires,” said Swasey. “We’ve seen (video rental) stores, kiosks come and go. We believe the future is streaming, so we’re putting a lot toward that.”

Media professor Biggs thinks that’s a safe bet.

“The instant access without any hassle offered by Netflix makes this movie-viewing option extremely attractive to folks with high-speed Internet access or the need to hold on to videos for longer periods of time without having to pay additional rental fees,” he said.

According to www.blockbuster.com, Blockbuster announced an alliance in 2008 with NCR for vending, providing customers with another option for accessing movies and in 2009 announced alliances with TiVo, Samsung and Motorola to improve distribution, but so far, those moves haven’t been enough.

Blockbuster officials stated in a mid-March report to shareholders that bankruptcy was a possibility. Shares of Blockbuster (NYSE: BBI) plummeted to a 24-cent low last month from a 52-week high of $1.56 on Sept. 17.

The NPD study said that through the first half of 2009, video rental kiosks such as Redbox garnered 19 percent of video rentals; subscription services such as Net-flix had 36 percent of rentals and traditional brick-and-mortar stores maintained a 45 percent share.

If current kiosk-category expansion plans are implemented, NPD anticipates that video rental kiosks will make up nearly 30 percent of video rentals in the U.S. next year.

“The ease of being able to drop a Redbox disc off at many locations throughout town, plus the lower rental rate of $1 a night, makes Redbox attractive to folks who want to physically pick up a DVD for an evening of movie viewing,” Biggs said.

Kiosk Founder Seeks Blockbuster Board Seat

Infighting at Blockbuster spills over into board of directors. Meyer wants in. Problem is he originally got in at $6.50/share (2007) and now those shares are worth 30 cents (ouch...).

Kiosk Founder Seeks Blockbuster Board Seat | homemediamagazine.com

A Blockbuster investor and founder of DVDXpress movie rental kiosks April 8 sent a proxy notice to shareholders soliciting their support to join Blockbuster’s seven-member board of directors.

Gregory Meyer, who owns 620,000 shares of Blockbuster stock, is seeking to replace board member James Crystal.

The Dallas-based DVD rental company’s entire board, including CEO Jim Keyes, is up for re-election at the annual shareholder meeting May 26.

Meyer in 2001 founded DVDXpress, a kiosk vendor with 1,000 units he later sold to Coinstar in 2007. He then served as managing director of DVDXpress until 2009, when it was merged with Redbox.

In the proxy filing, Meyer said Crystal was named to the board in 2007 when Blockbuster shares traded at $6.50 per share. They now trade for around 30 cents per share.

He said Crystal sits on seven different company boards, which does not allow the adequate time needed to help turn around Blockbuster’s operations.

“It is difficult to see what good Mr. Crystal’s ‘risk management’ has done for Blockbuster shareholders over the past three years given that significant market share has been lost to competitors and the value of the stock has been decimated,” Meyer wrote in the filing.

In addition Meyer cited the board’s relatively low ownership of Blockbuster shares — underscored by Crystal’s 140,000-share stake largely acquired through time served and not on the open market — as a catalyst for a change in directors.

Blockbuster CEO Jim Keyes reiterated his support for Crystal, saying Meyer's ownership stake in the company was not grounds to become a member of the board.

“Jim Crystal is very important for his experience with the company during the last three years and invaluable assistance in Blockbuster’s plans for recapitalization of the company and the transformation of our business model," Keyes said. "His continuity in board service, along with the others on the company’s slate, will play a key role in our success at Blockbuster."

DVD KIosks - Coinstar & Redbox Drop

Despite contentions that the company was going to face questions "they won’t be able to work around" after yesterday’s announcement of its Q4 2009 financials, redbox parent Coinstar Inc. met Wall Street expectations thanks at least in part to the growth of its DVD-rental business, according to Reuters.

But stock prices dropped somewhat overnight, apparently based on fears that its workaround efforts aren't going to be as successful as the company says they will be.

The Bellevue, Wash.-based Coinstar, which also makes coin-counting machines, said it rolled out nearly 9,000 DVD-rental kiosks last year.

Net Q4 income attributable to Coinstar was $5.5 million, or 18 cents a share, versus $4.2 million, or 15 cents a share, in Q4 last year.

Read rest of story

Walmart and Target Squeeze Redbox

Walmart and Target team up to aggravate Redbox.

Wal-Mart is boxing out Redbox. Wal-Mart (WMT), the world's largest retailer, has imposed strict limits on the number of DVDs any one customer can buy at a time, making it harder for movie-rental kiosks such as Coinstar's (CSTR) Redbox to get their hands on large numbers of newly released discs.

The new rules took effect Feb. 1 and include a five-DVD cap on new releases, mirroring limits placed by Target (TGT) in December. Target's cap remains in effect for one week to several weeks after a movie is released to stores

Rest of article

NCR’s DVDPlay Buy Sets Up Battle, But Is Fight Already Over?

Continuing thread on WSJ on how realistic it is for NCR to operate DVD kiosks in a market run by Hollywood more interested in on-demand and web offerings.

NCR’s DVDPlay Buy Sets Up Battle, But Is Fight Already Over? - Venture Capital Dispatch - WSJ

By Scott Austin

“Ladies and gentlemen, in the red corner, out of Bellevue, Wash….You know this company for its coin counting, but it also operates more than 22,000 Redbox DVD rental machines across the nation. Here to defend its title in DVD dispensing, please welcome….Coinstar!

And in the blue corner, our challenger, hailing from the suburbs of Atlanta….A virtual unknown to consumers, you may have encountered one of its nearly 3,800 blue Blockbuster Express kiosks. This company grew up as National Cash Register, let’s here it for NCR!”

Okay, so this little rumble may not be as exciting as we’ve made it out to be. But after NCR acquired 1,300 DVD machines through the acquisition of venture-backed start-up DVDPlay, it’s clear Coinstar and NCR will be slugging it out toe-to-toe for the right to rent DVDs for $1 a night in supermarkets and convenience stores.

“Redbox (Coinstar) has taken a substantial lead,” said Brian Jacobs, a general partner at DVDPlay investor Emergence Capital Partners. “NCR is determined to make it a good two-party race. They’re consolidating some of the other players and DVDPlay is key to that plan.”

NCR’s kiosks hold more than 900 DVD titles and are also digital-download-ready. In time, consumers will be able to download movies from the kiosks to portable memory cards.

But Martin Peers, the deputy editor of The Wall Street Journal’s Heard on The Street column, says NCR’s push to fully operate the DVD kiosks - rather than its traditional role of selling and servicing them - could flop. (Read Peers’ column here.)

“NCR has to master not only a different business model but also an industry in the midst of turmoil,” Peers writes in his column. “Continued growth of the kiosk business is uncertain. Several Hollywood studios have been holding back new-release movies from discount kiosk operators, including NCR, upset about their low pricing. While operators can find alternative supplies, they can’t necessarily offer a new DVD immediately. ”

Making things more difficult for NCR, Peer writes, Hollywood is de-emphasizing DVDs, putting more effort into video-on-demand and Web offerings.

Perhaps that’s was a motivational factor in DVDPlay’s venture backers decision to sell out. Terms of the acquisition weren’t released, but we do know that the company’s ambitions were large early this year. The company told VentureWire in June 2008 that it was in active discussions to raise at least $100 million by the end of the fourth quarter. That round never materialized. DVDPlay’s investors - Emergence, El Dorado Ventures, Palo Alto Venture Partners and Vanguard Ventures - put $23 million into the company in a recapitalization round in 2006, with Vanguard investing a few million dollars more over the next few years, according to VentureWire records.

-With Ty McMahan

NCR's DVD Play Could Be a Flop

WSJ article warns that NCR's DVD Play could be a flop. Not like Hollywood is going to behave like an ATM customer.

HEARD ON THE STREET: NCR's DVD Play Could Be a Flop - WSJ.com

ny time a company in a staid and unexciting business jumps into Hollywood, investors should be wary. NCR shareholders, that means you.

As NCR highlighted Thursday with the acquisition of DVDPlay, a DVD-kiosk chain, the maker of bank cash machines sees the DVD-dispensing business as a growth opportunity. Including 1,300 kiosks acquired in the deal, NCR will finish the year with 3,800, with plans to get to 10,000 by the end of 2010. Its main rival, Redbox parent Coinstar, in comparison, has 22,210 in place now.

NCR's competitive advantage is its partnership with Blockbuster, which allows NCR's machines to carry the Blockbuster Express name in exchange for a revenue share. That holds risks for Blockbuster. Offering DVD rentals for $1 a night, the kiosks could cannibalize its store business. But Redbox, charging the same, is already having an impact.

Indeed, cash-strapped Blockbuster arguably got the better end of the deal. Not only is NCR financing the business, putting up $60 million this year and likely more next year, it is also handling most other aspects, including procuring most of the DVDs. It isn't using Blockbuster's supply arrangements for most new-release DVDs, the hottest items at the kiosks.

That's a departure for NCR, whose role has traditionally been to sell and service its vending machines. NCR believes that by fully operating the DVD kiosk operations, it can open up a new source of business. Indeed, Adams Media Research projects kiosk rentals to rise 42% to $1.3 billion in 2010 from this year. That puts kiosks at 15.6% of the stagnant rental market, from 11% this year.

Investors appear to be warming to the plan. NCR stock is up 16% since Thursday. J.P. Morgan upgraded the stock Friday, estimating the DVD business could drive 5% revenue growth at NCR in 2010.

But investors may be overexcited. NCR has to master not only a different business model but also an industry in the midst of turmoil. Continued growth of the kiosk business is uncertain. Several Hollywood studios have been holding back new-release movies from discount kiosk operators, including NCR, upset about their low pricing. While operators can find alternative supplies, they can't necessarily offer a new DVD immediately.

What's more, partly because of price deflation wrought by Redbox and others, Hollywood is putting more emphasis on alternatives to DVDs, like video-on-demand offered by cable services or Web-based digital offerings.

It is likely to be many years before the physical disk fades completely. And NCR says its kiosks will let people download a movie onto a portable memory card. But consumers will likely have a similar capability at home, limiting the appeal of doing it at a kiosk.

Operating a DVD dispenser shouldn't be more complex than making machines that spit out cash from a hole in the wall. But NCR is about to find Hollywood is a world unto itself.

Write to Martin Peers at [email protected]

NCR Deal Raises the Ante In Blockbuster-Redbox War

Give 'em credit - NCR keeps the ball rolling on DVD kiosks in real-life. They are buying locations with DVDPlay and rebranding Blockbuster. By end of year the number is expected to almost hit 4000 units. In related news a startup in Minnesota has machines with 3000 discs now + the usual legal skirmishes.

NCR to Acquire DVDPlay, Pitting Blockbuster Against Redbox in Kiosk Battle - WSJ.com

By SARAH MCBRIDE

NCR Corp. is acquiring DVD kiosk operator DVDPlay Inc. and converting its 1,300 kiosks to the Blockbuster Express brand name, a move that challenges rival Redbox Automated Retail LLC.

The deal, expected to be announced Thursday, means NCR will end the year with 3,800 kiosks, still a small number compared with market leader Redbox's more than 20,000 U.S. kiosks. But acquiring DVDPlay gives NCR a leg up in one of Redbox's weakest markets, California, where DVDPlay has kiosks in popular spots such as Safeway Inc. stores. Redbox is a unit of Coinstar Inc.

Movie-rental giant Blockbuster Inc. licenses its brand to NCR and takes a cut of rental revenue from the kiosks, which are free-standing units that operate similar to vending machines, renting out movies for as little as $1 a night. As NCR replaces DVDPlay kiosks with Blockbuster kiosks, the company plans to move them to better locations, often outside the building so that consumers can still use them if the store is closed.

Converting kiosks to the Blockbuster brand appears to boost traffic significantly, which NCR says it learned after acquiring Houston-based TNR Holdings Corp. in April and rebranding TNR's kiosks.

Once the Blockbuster name gets highlighted onto the kiosk, "there's a greater awareness of what it does," says Alex Camara, vice president and general manager, NCR Entertainment.

Many kiosk operators ran into problems in recent weeks obtaining certain new titles, as some studios try to keep their newest releases out of kiosks to avoid devaluing a product they are trying to sell with a list price close to $30. The kiosk operators had sidestepped restrictions several studios placed on distributors that do business with kiosks by purchasing DVDs from big-box retailers like Wal-Mart Stores Inc. and Best Buy Co.

But now, many retailers appear to be placing restrictions on the numbers of DVDs kiosk operators can purchase, typically letting kiosk representatives purchase just three copies of any single title. That is leading to shortages of many new titles in some areas, such as Fox's "Night at the Museum: Battle of the Smithsonian," Warner Bros.' "Terminator Salvation," and Universal Pictures' "Public Enemies."

Redbox has lodged antitrust lawsuits against News Corp.'s Twentieth-Century Fox, Time Warner Inc.'s Warner Bros. and General Electric Co.'s Universal Pictures. Last week, it amended its complaints to reflect the restrictions at retailers. News Corp. owns The Wall Street Journal.

Raising the ante in the low-cost rental business, Blaine, Minn.-based Mosquito Productions recently unveiled a kiosk with six-cents-an hour rentals for new titles. Its BigBox DVD kiosks, which hold between 2,000 and 3,000 discs compared with around 500 for Redbox and 950 for Blockbuster Express, are in just four locations in Minnesota and Wisconsin.

Separately, Columbus, Ohio-based DVD kiosk operator E-Play LLC filed a lawsuit in Franklin County Common Pleas Court on Nov. 16 against NCR, alleging NCR was inappropriately using some E-Play technology without licensing it. A judge has ordered the matter into arbitration.

A spokesman for NCR said the company doesn't comment on litigation.

Blockbuster Express Consumer Review

Consumer reviews Blockbuster DVD rental kiosk in Duane Reade.

My First Experience With Blockbuster Express – It’s the Future
by Allen Stern on December 7th, 2009

While I live in NYC and can touch the Empire State Building from my window, sadly there are only small mom & pop shops near my apartment. There are no Starbucks, McDonalds, Borders, etc. There are also no movie rental shops anywhere in the vicinity. But on a trip to the local Duane Reade, I noticed something new in the store — a Blockbuster Express video rental machine.

RedBox provides movie rental machines around the U.S. and is about to start trials of video game rentals. My sister seems to love RedBox — I have not had a chance to try the service as there are no RedBox machines near my apartment. It looks like Blockbuster Express is similar to RedBox. I gave the Blockbuster Express machine a try and here are my thoughts on the experience.

The Blockbuster Express website allows you to register to create a list of movies you would like to rent. I found this to be a worthless feature because you can’t actually see real-time inventory or even reserve a movie for a later rental. You can view the total inventory in the machine and it appears all of the machines have the same inventory. My sister tells me that with RedBox you can reserve a movie at a specific RedBox location.

The machine itself was easy to use although there appears to be some issues with the search functionality. For example, I entered “Mall” in the hopes of renting Mall Cop. No results were found. I began to browse and on the first page the movie “Frat Party” appeared. I then tested the search by typing in “Frat” but that search also returned no results. So my suggestion is if you plan to use the machine, just use the browse button. It looks like there are about 200 movies in the machine with 28 pages of 8-10 movies on each. You can also view movies that will be added to the machine soon.

I selected Transformers 2 and used the free rental code posted below. The machine asked me to swipe my credit card and asked for my email address to send me a receipt. You can also signup for promotions on the same screen. After that the movie popped out and when I arrived back home the receipt was in my email.

Movies cost $1/day to rent and the rental period ends at 9pm the following day so you could wind up with more than 24 hours for the $1. There is a long screen with terms that you need to agree to each time you rent. It looks like something about when you actually own the movie if you don’t return it.

Overall I was very pleased with the experience. While it would be great if there were more movies in the machine, for $1 I can’t complain. Now if they could just add one of those hot drink dispensing machines and a snack/popcorn machine too we’d be all set.

Are quick-service rental and purchase machines the future of retail shopping? Macy’s installed vending machines to sell electronics. Best Buy has vending machines in airports around the U.S. When I look at how much real estate a Blockbuster store occupies and how small these new Blockbuster Express machines take up, I wonder if we will soon be buying everything from a vending machine. On the other hand, people said ATM machines would end the bank teller position and that hasn’t happened as of yet.

As an aside, if you do try the Blockbuster Express video rental machine, enter the code KIOSK for a free rental. I rented Transformers 2 and as a huge Transformers fan, I can say that I am very glad I got the rental for free.

http://www.centernetworks.com/blockbuster-express-video-rental

Kiosk Stocking Via Walmart?

Redbox Employee Buys 100 DVDs at Walmart to Stock Kiosks

Redbox Employee Buys 100 DVDs At Walmart To Stock Kiosks (WMT, CSTR)

Is Walmart secretly keeping Redbox movie rentals kiosks stocked with DVDs at a discount?
Walmart says no, but Pali Research's Rich Greenfield implies otherwise in a note written this week (sub req'd).

Greenfield quotes a source who says he saw a Redbox employee buy 100 copies of Ice Age 3 at Walmart. The Redbox employee said "they have a special deal with Walmart." The Redbox employee told Greenfield's source he paid with a gift card Redbox provided for him.

This account conflicts with what Redbox is saying about Walmart in a new lawsuit. Redbox is accusing Walmart of selling limited amounts of DVDs to customers, as few as three at a time, according to the LA Times.

Hollywood studios won't sell DVDs to Redbox because they think it devalues DVDs, undermining sales.

When asked if Redbox has a relationship with Walmart as a workaround, a Redbox spokesperson tells us it "employs alternative acquisition channels, which includes major third-party retailers."

A Walmart spokesperson denies both the Redbox lawsuit allegation, and the implication of Greenfield's source, telling us, "I can share for a fact that Walmart does not participate in purchase deals or any types of discounts on DVDs with any purchaser," adding "Walmart has not instructed stores to limit sales of DVD movies at this time."

Regardless of what these companies say, Redbox is struggling to get movies in its kiosks. Greenfield doesn't think the lack of movies will hammer the company too badly, but if it keeps buying DVDs at retail prices, it raises some issues:

Letʼs assume that Redbox buys at least 40 DVDs per week to freshen up its 600-700 DVD library in each kiosk. If half of those are from studios that do not distribute to Redbox, it implies that on average Redbox is buying 20 DVDs per week per kiosk at a retailer, which in most cases appears to be Wal-Mart. With over 21,000 kiosks that implies 22 million DVDs need to be purchased growing to over 30 million as Redbox expands its kiosk installations to over 30,000 by year-end 2010.

DVD Rental Kiosks - A Path to Save Blockbuster?

Commentary on why Blockbuster is getting killed (why rent for $3 when you can rent for $1) and how the announced "to be deployed" in Duane Reade is good as long as it happens quick. With the continual "to be deployed" buzz though we wonder if it is more for raising capital and posturing. When will units actually "have been deployed" and impact revenue?

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Earlier this week, I rented from a Redbox for the first time. I have walked by these kiosks in our area for well over a year now, and in recent months they’ve become quite numerous — Redbox lists 19 of them within 10 miles of my house alone. The allure of a movie for just a buck a night is just too good of a deal to pass up.

While entering my selections into the kiosk — Star Trek and Angels & Demons — I couldn’t help but wonder why Blockbuster wasn’t doing the same thing. Heck, it costs you $5 to rent these same movies at their stores no matter whether you return them the next day or however long your local store allows the movies to be out.

It’s for this reason why Blockbuster is struggling. In this new world, it no longer is worthwhile to have a storefront because of the overhead costs. Think about it. Netflix has considerably less infrastructure costs because all its business is online and only needs shipping warehouses to serve its customers; Redbox has even less overhead since it essentially freeloads off the locations where its kiosks sit.

There’s just no way that the company can be on a level playing field with its competitors because of this. Tuesday’s news of the company partnering with NCR to place 200 “Blockbuster Express” kiosks in Duane Reade Drugstores across New York City could arguably be Blockbuster’s path to salvation.

When the company is done, about 2,500 kiosks will be up and running around the country. Each will hold about 900 DVDs, which will give the movie retailer an opportunity to offer a wider selection that that of Redbox, which can only hold about 500 discs.

As the company moves to this system, it will allow Blockbuster to continue closing down its retail locations, which have become its Achilles heel. This will stink for those employees that could soon find themselves out of a job, but its just a reality of our modern digital economy.

It’s going to be very interesting to see how Redbox responds. Blockbuster eliminated its competition by simply being able to offer a broader selection of movies than its smaller competitors, and now the company that arguably pioneered the movie rental kiosk finds itself in the same situation.

One thing it has so far as an advantage over Blockbuster is scale — some 17,500 kiosks are located in McDonald’s, Wal Marts, Walgreens, and other grocery and drug stores around the country. Blockbuster will need to quickly ramp up to legitimately compete.

Revelations Helps Launch DVD-Less Kiosk Biz

He plays majestic screen figures like God ("Bruce Almighty") and Nelson Mandela (the upcoming Clint Eastwood-directed "Invictus"). Can Morgan Freeman's backing help launch a company trying to infiltrate the digital DVD download business?

Freeman and Revelations Entertainment partner Lori McCreary have thrown their financial resources and technical expertise behind Digiboo LLC, a new venture that will allow consumers to rent films by plugging in a small, portable USB 3.0 flash drive into kiosks that will be set up at retail outlets beginning in January.

Run by CEO Richard Cohen--former MGM Home Entertainment and Consumer Products president--the L.A.-based Digiboo launches a pilot program in January with Oregon-based Movie Gallery Inc. that will see 100 digital movie kiosks operate in Hollywood Video and Movie Gallery retail stores, with plans to expand into airports, coffeehouses and college campuses.

While Revelations partners Freeman and McCreary are best known for feature film pursuits--she and Revelations are producers of “Invictus"--they have long experimented in hi-tech ventures.

Samuel Edge, the CEO of Digital Revelations, will become Digiboo’s Chief Technology Officer and will be involved day to day in the new venture. Revelations’ last tech venture was the digital movie-store ClickStar, a joint venture between chipmaker Intel and Relevations that launched at a time when consumers might not have been ready for digital downloading.

McCreary and Edge said things are changing. Downloads are speedy and easily played on home entertainment devices. Their involvement in the venture came from continuing dialogue with Intel.

“We were invited by Intel a year ago to help put together a technical strategy to distribute digitally, using USB as the medium,” Edge said. “USB 3.0 is remarkable for its portability, and the ability to walk to a kiosk, and walk away in eight to 15 seconds with a movie in your pocket.”

Digiboo joins Blockbuster on the battleground of this fledgling film rental technology, which eliminates DVDs in favor of downloads that can be played on computers, mobile phones, netbooks, televisions and other home devices.

While Blockbuster reportedly will launch its program using SD cards, Digiboo chose USB 3.0 technology, which the company says are already compatible to computers and can be adapted to other devices with an installed base device. An 8 GB unit holds up to four movies, with rental periods expiring at the end of 3-day windows, and copyright protected by digital rights management technology.

It is inevitable to compare any new video venture to Redbox and its $1.09 per day DVDs that have shaken up Hollywood.

Digiboo won’t beat that price—Cohen said that price point will vary during the pilot program, but will likely be comparable to the $3.50 to $5.50 that Hollywood Video and Movie Gallery charges for rentals. But Digiboo kiosks will offer more than 1000 movies and TV shows for rental and sale, he said, and the download system eliminates the need for a trip to return a DVD.

“We don’t have any fantasy of knocking Redbox out of the box, because DVDs will remain a successful business for a good long time,” Cohen told Daily Variety. “The marketplace is very big, and there’s room for Redbox, Netflix, Blockbuster, Hollywood Video, and us. Each serves a portion of a market that sometimes overlaps. For people who want a $1 a day rental, we’re not the better alternative, but we believe we offer sufficient benefits, including portability, to achieve a meaningful marketshare. Newer televisions are being built with USB ports, and we’re working with a manufacturer on a relatively inexpensive unit that will adapt other televisions. The netbooks that have become so popular won’t ever be able to play DVDs, but they are equipped to handle USB.”

Aside from his MGM stint, Cohen was CEO of DVD kiosk company TNR Entertainment and also former exec veep in home video for Disney. He formed the company last year with Jeff Karbowiak, Blake Thomas and Eric Villette, who were also senior MGM Home Entertainment executives. Funding, he said, comes from a variety of investors in the U.S. and Europe, and he said that Revelations has become its most prominent investor, with McCreary joining the Digiboo board and Edge playing a key day to day role in the company.

He declined to say if Freeman will use his iconic industry status to help win studios over into supplying their titles to the new venture.

“They bring enormous credibility and intelligence to the company and validate the approach,” said Cohen, who said he’s in ongoing negotiations with studios to supply product, but was confident that the kiosks would be well represented with a wide selection.

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.”

Blockbuster Raises Money To Push On

Story on Reuters reporting Blockbuster has successfully raised additional capital and now has the cash needed to reposition. Sounds a bit like General Motors in many ways but then again they had to do this and they have done it. Maybe it will work.

Blockbuster CEO says financing should enable growth
Thu Sep 17, 2009 8:55pm EDT
By Sue Zeidler

Story on Reuters

LOS ANGELES (Reuters) - A round of capital-raising and refinancing has alleviated a cash-flow crunch at DVD rental chain Blockbuster Inc, enabling it to revive plans to reposition itself and get back on a path for growth, Chief Executive Jim Keyes said.

Loss-making Blockbuster is trying to ramp up its stores, kiosk, digital and by-mail offerings to compete against fast-growing rivals like kiosk provider Coinstar Inc's Redbox and Internet rental site Netflix.

"The new financing will allow the company to make investments designed to grow the business," said Keyes.

"This provides a great amount of flexibility. We now have more runway to complete the transformation of our business," he said.

"In 2009, we've been cash flow starved, but we've just eliminated a lot of that pressure," said Keyes, referring to the company's doubling of a private note offering to $675 million on Thursday.

Blockbuster in May also completed funding on a $250 million amended and extended credit facility, slashing its required debt payment due 2010 to $90 million from $400 million.

"This gives them the lifeline they need," said Stacey Widlitz, analyst with Pali Research, referring to the private note offering.

"Blockbuster was strapped for cash and had to skimp on inventory ... and that's a huge swing factor for the company. They won't be able to correct inventory overnight, but this should give them the flexibility to move toward having product back in stock in Q4 and Q1."

Since mid-August, Blockbuster's shares have risen about 50 percent to Thursday's close of $1.39 a share.

Keyes said a pushback by various large Hollywood studios against rival Redbox -- amid fears its $1 per night rentals at more than 17,000 automated kiosks is hurting business -- should help Blockbuster as it moves ahead with its own plans to install 10,000 stand-alone DVD rental kiosks by end of 2010.

"Redbox will have difficulty in purchasing titles," said Keyes, who said he supported Hollywood's position for a "vending rental window," which would keep hot new releases out of kiosks for a few weeks.

He said Blockbuster will now be able to continue ramping up its digital offerings to compete more effectively with rivals Netflix, cable and satellite TV operators and digital movie services like Apple Inc's iTunes.

The company this week said it may close up to 960 stores by the end of 2010. But Keyes stressed the company may not have to close them all.

"If we can't fix those, we'll go ahead and close them," said the former 7-11 CEO, noting he believed the brick-and-mortar store model will be around for years to come.

"The store, we believe, has the ability to remain relevant indefinitely if we continue to change it," he said.

Blockbuster has said it may also convert up to 300 of its stores to outlets and up to another 300 were subject to lease mitigation or termination efforts.

Altogether, up to 1,560 of the company's 3,750 U.S. stores are either subject to closures or other restructuring efforts, it has said.

Tesco introduces DVD kiosks

Tesco will offer DVD rental kiosks offering new release films in more than 100 stores in a deal with The Movie Booth. Tesco has already tested the kiosks in Ireland. Each automated kiosk holds 620 films and the fee per film is £2 for a night’s rental. Marketing Week in UK mention

DVD Kiosks: Blockbuster to Close More Stores

Aug. 14 (Bloomberg) -- Blockbuster Inc. Chief Executive Officer James Keyes said the largest movie-rental chain may be more aggressive in closing stores as it deploys as many as 10,000 rental kiosks by mid-2010. The company is focused on increasing cash flow, rather than boosting sales, in a “very challenging credit market,” Keyes said.

Read full article

Blockbuster Kiosks May Lead to ‘More Aggressive’ Store Closures
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By Meg Tirrell

Aug. 14 (Bloomberg) -- Blockbuster Inc. Chief Executive Officer James Keyes said the largest movie-rental chain may be more aggressive in closing stores as it deploys as many as 10,000 rental kiosks by mid-2010.

The company had more than 7,100 stores in the U.S. and overseas at the end of the second quarter and has said it plans to close about 300 this year.

“We could be more aggressive as vending ramps up,” Keyes, 54, said yesterday in a telephone interview, referring to store closures. “We’re deploying as many as 10,000 vending machines by the middle of next year.” Blockbuster, based in Dallas, plans to have 500 kiosks by the end of this month and more than 2,500 by year-end.

The company is focused on increasing cash flow, rather than boosting sales, in a “very challenging credit market,” Keyes said. Blockbuster has a $250 million revolving loan due Sept. 30, 2010, and must repay more than $350 million of outstanding long-term debt by the end of next year, Wedbush Morgan Securities Inc. analyst Michael Pachter wrote in an Aug. 11 research note. It had $99 million in cash and equivalents as of July 5, down 36 percent from $154.9 million as of Jan. 4.

Sales declined in each of the last four quarters at Blockbuster, which has seen increased competition from by-mail service Netflix Inc. and daily rental kiosks run by Redbox, a unit of Coinstar Inc. Blockbuster has started competing in both services, and also offers digital video-on-demand entertainment.

Debt Refinancing

The company aims to extend its debt maturities and reduce the cost of capital, and is in talks with its lender about refinancing debt, Keyes said.

“They need the credit markets to loosen up and they need to refinance,” Pachter said in a telephone interview yesterday. “They’re not on track to repay this debt in the time frame they need to, so they’ve got to extend the terms.”

Before Blockbuster reported second-quarter results yesterday, Pachter recommended buying the shares and expected them to more than double to $2 within 12 months. He said he doesn’t own the stock.

Blockbuster lost 14 cents, or 16 percent, to 72 cents yesterday in trading after the New York Stock Exchange closed. The shares had fallen 32 percent this year before second-quarter results were released.

The company lowered its 2009 forecast for earnings before interest, taxes, depreciation and amortization, projecting $270 million to $290 million. That’s down from a previous prediction of $305 million to $325 million. It reported a second-quarter net loss of $39.7 million, or 21 cents a share, on sales of $1.02 billion.

To contact the reporter on this story: Meg Tirrell in New York at [email protected].

DVD kiosks like Redbox have rivals seeing red

Nice article with a lot of useful numbers on Redbox including transactions per second along with some other ROI information. Redbox expects to have 22,000 kiosks installed by end of 2009 (up 61% from 2008). That may eclipse Kodak for "installed kiosks actually working..." baseline.

By David Lieberman, USA TODAY
We all know that DVDs are dying, and pretty soon people who want to watch movies at home will just stream or download them from the Internet, cable or satellite. Right?
Don't tell that to the executives at Redbox. This mouse of a company — it generated just $389 million in revenue last year — is flooding Walmart, McDonald's, 7-Eleven and other retail, supermarket and convenience store chains with vending machines that rent the latest DVDs of Hollywood blockbusters for just $1 a day.

That combination of low price and convenience has suddenly made Redbox a force with consumers — and a threat to Tinseltown studios and rental giants such as Blockbuster and Netflix, which typically charge much higher prices.

"Our (DVD) product rented at a dollar is grossly undervalued," News Corp. President Chase Carey, whose company owns the Fox studio, told analysts last week. "It's a real issue. And we're actively determining how to deal with it."

It may be too late. Following agreements with Albertson's and Kroger supermarkets, Redbox expects to end this year with 22,000 kiosks in all 48 mainland states, up 61% from the end of 2008. Company parent Coinstar says that revenue from the DVD rental operation could double to as much as $780 million.

"We calculate that 150 million people every week walk within 10 feet of one of our locations," Redbox President Mitch Lowe says. "The way we'll grow is by focusing on the customer experience. That's how we've come out of nowhere."

Success breeds competition, and Blockbuster says it will have nearly 3,000 kiosks renting and selling discs and games by the end of this year, growing to 10,000 in late 2010.

"One of our price points will be 99 cents," Blockbuster CEO James Keyes says. "But we will have a broad range of other offerings."

For now, Redbox is sticking with DVDs while it tests interest in $1-a-day Blu-ray discs.

Its machines stock as many as 700 discs, usually about 200 different titles. Consumers use a credit or debit card to rent DVDs — no membership required — and can return them to any Redbox kiosk. The machines read bar codes on each disc to register what's gone out and come back.

Renters hold on to discs as long as they want; after 25 days (and a total charge of $25) they can keep the DVD. About 10% do so.

The machines constantly communicate with Redbox, primarily via cellphone transmissions. People can go to the company's website to see what's in stock at different kiosks, and reserve a movie at a particular machine.

But kiosks are taking off mostly because credit card companies have improved their ability to securely handle massive numbers of transactions.

"We're among the top 10 credit card processors in the country," Lowe says. "On an average Friday and Saturday, in the evening, we process 70 to 80 transactions per second, which is around where Amazon has stated its peak Christmastime sales volume was."

Low-price model

Redbox pays about $18 for a DVD and rents it about 15 times at an average of $2 per transaction. The company sells half of the used DVDs back to wholesalers for as much as $4 per disc, and sells about 3% directly to consumers for about $7. It destroys most of the rest.

That low-price model suits Redbox just fine, but not so much the Hollywood studios, which count on home video rentals and sales for about half of their revenue.

If consumers figure it's only worth $1 to see a movie at home — instead of the $4.50 or so charged by rental chains and video on demand — then it could "cripple the economics of today's movie business," Pali Research analyst Richard Greenfield said in a recent note.

Universal was first to fight back: Last year it insisted that Redbox not rent the studio's new DVDs until 45 days after they're available elsewhere. When Redbox refused, Universal told the kiosk firm's top wholesalers to cut off its supply of the studio's DVDs.

Redbox asked the U.S. District Court in Delaware to find Universal guilty of violating antitrust and copyright laws. Redbox still offers Universal flicks, often after buying its DVDs at retail.

Universal declined to comment for this story, but told the court that the case simply involves Redbox's desire to get Universal's DVDs "on terms that are at odds with the terms on which Universal wants to sell them."

Fox last week began asking wholesalers to wait 30 days before selling its new releases to Redbox.

Hollywood is divided, though: Disney is supplying new releases. Last month Sony agreed to do the same — on DVD, not Blu-ray — for five years; Redbox will destroy used discs when it's through renting. "It's difficult to fight against a consumer trend like this," Sony Pictures Home Entertainment President David Bishop says.

On Tuesday Lionsgate also reached a five-year deal with Redbox.

Blockbuster, says it wouldn't mind if stores got DVDs before they hit the kiosks. That way new discs bought for the stores would "move from the shelves to the vending channel, and then we'd have an advantage with significantly (lower) cost of goods," Keyes says.

But Redbox says that its kiosks with their $1-a-day discs have changed the entire video-rental game. "This has put the power of the decision in the customer's hands." Lowe says.

Find this article at:
http://www.usatoday.com/tech/products/2009-08-11-rental-dvd-redbox_N.htm

Kiosk Wars - Redbox versus E-Play

Article on HomeMedia detailing some of the competition going on between the Redbox/Coinstar group and the E-Play (NCR) group. Capacity of units along with speed of delivery beginning to emerge as arguments.

By : Erik Gruenwedel | Posted: 03 Aug 2009
[email protected]
Source Link

The competition in the rental kiosk market is rising.

In the burgeoning market for the ubiquitous $1-per-day DVD rental kiosks, competitive advantages revolve around kiosk location, title selection, disc quantity and transaction time, among other features.

Redbox’s announcement Aug. 3 that it would install 2,400 kiosks in Kroger-operated grocery and convenience stores appeared to underscore the Coinstar Inc.-owned juggernaut’s year-end goal of operating 20,000 kiosks nationwide.

When kiosk vendor e-Play Inc. (400 kiosks in operation) recently rolled out test DVD/video game rental kiosks at 77 Wal-Mart locations, in addition to select Best Buy stores, Wall Street took notice of the Columbus, Ohio-based upstart’s sudden presence in Redbox territory.

Indeed, Eric Wold, media analyst with Merriman Curhan Ford in New York who covers publicly-traded Coinstar, last month attempted to assuage “some concern amongst investors” regarding the impact e-Play could have on the “ultimate rollout potential” for Redbox.

In his tale-of-the-tape research note, Wold comparison-tested separate e-Play and Redbox kiosks located in and around six Best Buy stores in Austin, Texas. Wold found that Redbox kiosks carried an average of 155 titles with an average dispense time of 19 seconds per transaction compared to an average of 100 titles and a dispense time of 40 seconds per transaction at e-Play kiosks.

“We found that Redbox kiosks held an average of 55% more movie titles than an average e-Play kiosk, “ Wold wrote. “E-Play kiosks took an average of 21 seconds longer to disperse the DVDs once selection had been made and credit card swiped.”

The analyst noted “dozens of locations” for Redbox at numerous major retailers, including McDonald’s and Walgreens compared to scant visibility for e-Play kiosks.

“The lack of locations relative to Redbox is a clear disadvantage when trying to gain awareness with consumers as well as to win new retail accounts,” Wold said.

He also questioned e-Play’s video game rental selection (Redbox does not rent games), which he said averaged about 17 titles per kiosk in Austin.

“We believe this poor offering is likely to turn off video game renting consumers and negatively impact e-Play’s perception within the market going forward,” Wold said.

Needless to say, e-Play co-founder and CEO Alan Rudy didn’t agree with the report, which he characterized as biased and unprofessional.

Rudy said that following installation July 22 of new software, dispensing times at e-Play had overtaken Redbox, with customers receiving their initial rental disc in as little as five seconds. He said the company was rolling out so-called “expansion stations” that allow customers to order and pay for rentals at one screen and pick titles at another for a faster transaction.

He also questioned Redbox’s timing of the start of a transaction — an argument that soon sounded like a commercial airline CEO discussing competing departure and arrival times.

More importantly, Rudy said Wold completely missed e-Play’s primary point of differentiation: buying back used video games and movies. Customers receive a credit to their credit card at Wal-Mart and store credit at Best Buy.

“The reason we are in Wal-Mart and Best Buy is because in the same footprint they get video game buyback,” Rudy said. “The reason our kiosks don’t have a lot of video game rental titles is because we are not really in the video game rental business, we are in the video game buyback business.”

E-Play, whose kiosks are manufactured by NCR Corp., re-sells used product via its kiosks or third-party retailers.

Rudy said that at high-volume rental kiosks such as Wal-Mart, e-Play units carry more titles than Redbox due to the machine dispensing a physical disc separate of the sleeve. As a result, e-Play kiosks can hold up to 3,500 discs, compared to about 1,500 in a Redbox unit.

“At Best Buy, it is sort of different animal, the real focus is entirely on video game buy back,” he said.

He said buy back revenue is “add-on” revenue for e-Play on top of the $1-per-day rental business Rudy said Redbox has already proven to be commercially viable.

“It makes that 9-foot retail footprint a more valuable footprint,” Rudy said. “We want to get a lot more revenue out of our footprint.”

The CEO admitted that buy back kiosks have performed better at Wal-Mart and Best Buy than at gas stations, where gamers could get vouchers for gas purchases.

“Gamers told us they didn’t want to spend game money on gasoline,” Rudy said. “They view that as video game currency, which is what the retailers want: the ability to compete against Game Stop.”

He admitted that Redbox is ahead of the entire industry when it comes to studio distribution deals (including its much ballyhooed Sony deal), but said he was very happy with his current Disney deal.

“I’m hoping we see more Disney and Sony [deals] and less Universals,” Rudy said.

The executive said he remained upbeat with NCR (which owns a stake in e-Play) despite it becoming a primary backer of Blockbuster’s nascent Express kiosks. NCR also recently acquired The New Release kiosk brand (soon to be Express).

“It’s an interesting situation,” Rudy said. “We have a completely different machine [than Blockbuster]. We didn’t expect [NCR] to compete with us. It leads to some odd conversations. But they are still doing what we asked them to do.”

Blockbuster Express Comes to Town

First we've seen of the new DVD kiosks from Blockbuster. This has locator to help find these kiosks which have been deployed. Looks like Florida, Illinois, Oklahoma and Georgia. http://www.bbexpressweb.com

There is also a picture of the unit.

View image

Netflix Boss Plots Life After the DVD

Interview with Reed Hastings by WSJ on what comes after DVDs for Netflix. The idea being that online streaming within 4 years minimizes physical DVD market.

LOS GATOS, Calif. -- Netflix Inc. is a standout in the recession. The DVD-rental company added more subscribers than ever during the first three months of the year. Its stock has more than doubled since October.

But Netflix's chief executive officer, Reed Hastings, thinks his core business is doomed. As soon as four years from now, he predicts, the business that generates most of Netflix's revenue today will begin to decline, as DVDs delivered by mail steadily lose ground to movies sent straight over the Internet. So Mr. Hastings, who co-founded the company, is quickly trying to shift Netflix's business -- seeking to make more videos available online and cutting deals with electronics makers so consumers can play those movies on television sets.

His position offers a rare look at how a CEO manages a still-hot business as its time runs out. "Almost no companies succeed at what we're doing," he says.

Companies across the entertainment and technology landscape are struggling with how to profit from Internet video. There's still significant risk that Netflix could falter or lose out to another company that figures out how to do it first. And having picked his battle, the intense former engineer may risk missing other growth opportunities: Mr. Hastings hasn't yet expanded internationally or mounted a direct challenge to kiosks, such as Coinstar Inc.'s Redbox, that let customers pick up $1-a-night DVD rentals.

Mr. Hastings says he is still considering expansion opportunities outside the U.S. and has no plans to open kiosks.

One of Mr. Hastings's biggest hurdles will be persuading Hollywood studios to give Netflix rights to show more and better movies through its Internet service at a time when many studios are protective of their DVD-sales revenues. Late last year, Sony Corp.'s Sony Pictures threw a hitch into Mr. Hastings's plans when it temporarily blocked access to some of its movies from Netflix's Internet video service in a dispute over whether Netflix had rights to them.

Moreover, Mr. Hastings stumbled in an earlier effort to introduce a set-top box that would bring Internet video service into the living room. Netflix developed the hardware but then abandoned it after Mr. Hastings and other executives got cold feet.

Rest of article

Wal-Mart’s Kiosk Trial Raises Serious PCI, Data Ownership Issues

Wal-Mart, E-Play and NCR get called to explain by StorefrontBacktalk and Fred Aun article. Gist is trial of 77 stores running trial of used video buyback kiosks that take card data and drivers license info, and then talk about linking into retailer POS.

Written by Fred J. Aun of StorefrontBacktalk.com

Wal-Mart this month became the latest major retailer to experiment with self-service kiosks, selling space in 77 stores for units that buy back used video games and issue credits directly to various payment cards.

The initial trial is entirely isolated, with the kiosk vendor having access only to its own network and not to Wal-Mart’s. But the $375 billion chain is officially considering having the machines offer in-store credits in the form of gift cards, which would mean allowing the kiosks two-way access to POS and potentially CRM data. That would force some serious strategic debate about how far outside vendor kiosks can—and should—be allowed to play inside a retailer’s databases.

The initial version of the kiosks collect payment card information as well as drivers license data. Even setting aside the potential future POS/CRM access, the payment and highly-sensitive driver’s license data will force some of that debate right away. How secure are the kiosks? Who is ultimately responsible in the event of a security breach, both from a legal and PCI perspective?

Beyond lawyers and assessors, consumers and the dollars they control will likely blame the retailer for any problems that started with a kiosk in or right next to its store. Wal-Mart officials are stressing that the Wal-Mart logo will not be used on any of the trial kiosks, although the Wal-Mart blue and yellow brand colors will absolutely be used. “This is not Wal-Mart’s machine,” said Melissa O’Brien, a spokeswoman for Wal-Mart’s entertainment division. “We are leasing space to them in our store vestibules just like with do with other companies.” And that nuanced distinction will be explained to every Wal-Mart customer how?

The insistence that no brand be used displayed will be a nice point for the lawyers, but it won’t do much for public perception. PCI Safe Harbor and legal indemnification won’t help much if consumers feel betrayed.

Another troubling issue is data ownership. If Wal-Mart gets consumers to come to their stores and asks them to interact with a kiosk in the store, can the kiosk vendor use that information to help other retailers? As a pragmatic matter, how can they not do so?

Rest of article

DVD - Redbox Expands Circle K Deployments

MAY 20 | PHYSICAL: Redbox is adding more kiosks in Circle K convenience stores as part of its plan to boost its machine count by at least a third within the next eight months, the largest U.S. operator of movie-rental kiosks said today.

Redbox, which is owned by coin-exchange machine maker Coinstar, already has machines at Circle K stores in California, Arizona and Ohio. Redbox isn’t disclosing how many machines it has in Circle K stores, how many it will add or where they’ll be added. Circle K has more than 3,000 U.S. stores.

Redbox has led growth in the U.S. kiosk industry, which is expected to expand over the next few years as video store chains such as Blockbuster and Movie Gallery close underperforming stores. The company, which almost doubled its machine count last year, had 15,400 kiosks at the end of March and plans to have between 20,000 and 22,000 machines by the end of the year.

Coinstar said earlier this month that first-quarter sales from Redbox and the far-smaller DVDXpress brands jumped 156% to $154.7 million from $60.5 million a year earlier. Earnings, excluding some costs, for Coinstar’s DVD operations grew to $29.1 million, as Redbox boosted same-store sales by more than 30% from a year earlier and added 1,700 machines during the quarter.

Source Link

DVD Movie Rental - Netflix and Balance Sheets

Netflix bucks the trend of the DVD price war.Comment on Netflix, Coinstar, Redbox and the bloody balance sheet.

Netflix Bucks the Trend
By Rick Aristotle Munarriz
May 19, 2009 | Comments (0)

The DVD rental industry is seeing a lot of red lately. Between Coinstar's (Nasdaq: CSTR) Redbox machines, Netflix's (Nasdaq: NFLX) red envelopes, and Blockbuster's (NYSE: BBI) bloodied balance sheet, crimson seems to be a fashionable color.

In his Barron's Tech Trader column this week, Eric Savitz explores the cutthroat competition that Redbox kiosks -- 15,000 strong and counting -- are inspiring. In response to its machines, which spit out DVD rentals for just $1 a day, Blockbuster is testing a similar pricing strategy for in-store rentals, even as it teams up with NCR (NYSE: NCR) for its own automated solution.

Should Netflix worry about the price wars taking place in the real world? I don't think so, but don't just take it from me.

"Netflix's convenience is very strong, because we do the by-mail delivery to the consumer's home as well as the streaming," Netflix CEO Reed Hastings told us during an interview after last month's stellar earnings report. "That is what we focus on. Kiosk vendors focus on something else, which is super low price of DVD new releases, but you have got to drive to the store and drive back, and you are very conscious of having to watch it within 24 hours."

Rentals for a buck sound compelling, but the product isn't a fair match to Netflix. Even on a value basis, Netflix holds up surprisingly well. Its most popular subscription plan gives members unlimited rentals, with three movies out at any given time, for $16.99 a month. The Redbox equivalent of having three discs out at a time would run closer to $90 a month. Then you have to tack on the gas, time, and inconvenience of the roundtrip treks.

Kiosks are also limited in selection, naturally. Netflix has a catalog of more than 100,000 titles. Redbox machines can only stock a handful of mostly new releases. Netflix also makes on-demand streaming available to its subscribers at no additional cost, a bonus that also helps silence the lack of immediacy in conventional Netflix rentals.

This doesn't mean that Netflix can ignore its buck-a-day rivals. However, this is a bigger problem for the movie studios trying to protect the value proposition of DVD purchases than it is for Netflix. Let Hollywood see red; I think there's still plenty of room for all three major video-rental players to make a lot of green.

iTunes Kiosks for movie downloads on the go

Apple files patent for download kiosk. Just as the digital music and movie kiosk business appears poised to launch, it looks like startup companies in the space could face some heavyweight competition from Apple.

source link

Apple filed a patent in 2007 for a digital entertainment kiosk capable of delivering movies and music to portable devices over a wireless connection. The kiosks would be placed in areas where wi-fi isn’t available, such as on airplanes and in airports, according to the filing.

AppleInsider dug up the patent last week.

In the filing, Apple says it will deliver movies over a “virtual physical connection” between portable devices, mobile phones, etc. and the kiosk.

Apple says it chose to use a wireless connection rather than requiring that a device be hooked up to it because “the continuous engagement and disengagement of the media device connector may result in excessive wear and failure of the connector.”

Apple says the kiosks could be placed anywhere and “address deficiencies” in other systems and methods for delivering media.

“The media distribution system advantageously enables the distribution of media content to a media device via a [kiosk] residing in virtually any location such as an airport, hotel, stadium, train station, shopping mall, stores, planes, ships, public transportation vehicles and the like,” according to the filing.

Users could not only download new content to their devices, they also could access other digital content they own.

Sensors in the kiosk would be able to tell when a portable device (presumably an Apple portable) was nearby.

The kiosks would be filled with popular content, but it also would be able to connect with the iTunes store so that users could download other content.

Earlier this year, Warner Bros. and Paramount Digital Entertainment became the first studios to sign deals to offer downloads through digital kiosks in an agreement with MOD Systems. MOD, which is backed by heavyweights Toshiba and NCR, is in talks with three retailers to put kiosks in stores in the second half of the year in a pilot launch. MOD’s kiosks would allow users to save movies onto an SD memory card, the type used to store digital photos. Users would save the movie to the card and then place the card in a compatible device or use a bridge device to watch it on a TV.

DVD Kiosks - The Ongoing saga & latest

DVD 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
  

  
  

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  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
  

Netflix's looming nemesis: The buck-a-night DVD kiosk?

Even as he announced another quarter of soaring revenues for the booming movies-by-mail company, CEO Reed Hastings warned that Netflix might be facing a new—and formidable—competitor by the end of the year: A growing army of rental kiosks that offer the latest DVDs for $1 a night.

source link Ben Patterson blog

MarketWatch reports that Hastings and Netflix aren't "overly concerned" about Redbox, which boasts more than 12,000 kiosks nationwide in such retail locations as McDonald's, Wal-Mart, and Walgreens, because the Redbox kiosks (each capable of holding about 700 discs) only offer new releases, as opposed to Netflix's vast catalog of older titles.

That said, Hastings predicts that Redbox—and not, say, Blockbuster or Hulu—will be Netflix's "main competitor" by the end of 2009, according to Marketwatch.

Interesting—and I have to admit, I'd never even heard of Redbox until I starting reading about how Netflix is ... well, maybe not afraid of it, exactly, but clearly keeping a watchful eye.

I checked out Redbox's Web site and it all looks pretty simple—you just go up to a Redbox kiosk (I only found a handful of locations in New York City), pick a movie (you can also reserve one online), swipe your credit card, and take your rental DVD home.

You're charged a buck for each night you keep your movie, and you can return the disc to any RedBox location when you're done. There are no late fees per se, but after 25 days Redbox will charge your credit card $25 plus tax.

So, I'm curious: How many of you have rented movies from RedBox before? How was your experience? Would you consider dropping your Netflix subscription in favor of Redbox—or have you already? Should Netflix be worried? Let us know what you think.

Related:
Netflix CEO: Kiosks will be main competition

Netflix CEO: Kiosks will be main competition
By David B. Wilkerson
Last update: 6:27 p.m. EDT April 23, 2009Comments: 2
CHICAGO (MarketWatch) -- Netflix Inc. (NFLX:

43.40, -1.92, -4.2%) Chief Executive Reed Hastings said Thursday that the online DVD rental pioneer expects $1 kiosks to be its main competitor by the end of 2009, surpassing video stores. A growing number of customers who cancel their Netflix subscriptions cite kiosks as a reason why they dropped the service, Hastings explained. Commenting during a conference call with analysts, Hastings said Netflix is not overly concerned about the kiosks, despite their increasing ubiquity, because the kiosks focus on new release DVDs, which only account for about a third of Netflix's rentals. "Our differentiators continue to be our vast selection, over 100,000 titles, the convenience of mail and streaming," he said.

Blockbuster set to roll out rental kiosks

NCR and Blockbuster issue a new announcement of 10,000 kiosks to be installed by end of next year. Last year around this time we had a brief barrage of news of similar thread. Maybe this time...

03:51 PM CDT on Tuesday, April 21, 2009

By MARIA HALKIAS / The Dallas Morning News
[email protected]
Blockbuster’s answer to Redbox DVD rental kiosks is about to make its debut with 10,000 vending machines planned by the end of next year.

Last fall, Blockbuster partnered with NCR Corp. to plan its entry into the DVD vending business. The companies just finished a pilot test in Dallas and Oklahoma City, and on Tuesday, NCR said it acquired the remaining equity in TNR Holdings Corp. in order to accelerate the national rollout of Blockbuster Express machines.

Houston-based TNR, the second largest DVD vending business after Redbox, operates more than 2,200 DVD kiosks under the MovieCube and The New Release brands in dozens of supermarket chains including Kroger in the Dallas area.

Industry leader Redbox has more than 14,000 kiosks in several major chains such as Wal-Mart, Walgreen and most recently 7-Eleven. Movies rent for $1 a night. Redbox was acquired by Coinstar Inc. in February.

Dallas-based Blockbuster is a latecomer to the DVD vending business, similar to how it approached the online DVD rent-by-mail business started by Netflix.

Last month, Blockbuster chief executive Jim Keyes told analysts that he’s “glad that our friends at Redbox proved it out, because it is a good consumer proposition.” Keyes wants the business to evolve into digital downloading kiosks, instead of dispensing a limited number of copies stored inside.

It’s possible that TNR’s existing machines will be converted to Blockbuster Express, but that hasn’t been decided yet, said NCR spokesman Jeff Dudash.

DVD Kiosks - NCR Completes Purchase of TNR

News that NCR has accelerated its purchase of TNR with the intent of getting to market quicker with Blockbuster. Seems like a week doesn't go by without a story in the news that has "Blockbuster" and "survival" in the same sentence. Two weeks ago BB did manage to complete the refinancing of its credit faciiity (albeit reduced). Stock is down 75% since September and they have had to pull back on initiatives.

NCR Corp. has completed its acquisition of TNR Holdings Corp., the second largest DVD kiosk operator in North America, officials announced Tuesday.

The Dayton-based company (NYSE:NCR) made the purchase to accelerate the installation of Blockbuster-branded DVD rental kiosks in retail locations, such as supermarkets and convenience stores.

“This acquisition is a major step forward in NCR’s strategy of becoming the leading provider of self-service entertainment solutions,” said John Bruno, executive vice president of NCR Industry Solutions Group, in a statement.

NCR has purchased the remaining equity and debt in TNR for cash considerations. Other terms were not disclosed.

TNR operates DVD rental kiosks under the brands “MovieCube” and “The New Release” in supermarkets and grocery stores throughout North America. NCR had been a minority investor in Texas-based TNR since the summer of 2008.

That same year, NCR began a strategic alliance with Blockbuster Inc. (NYSE:BBI) to deploy DVD rental kiosks in a successful pilot program, that was the first step of a national rollout of thousands of units.

NCR employs about 1,300 in Dayton and 20,000 global employees. Stock had risen by 16 cents, or 1.7 percent, in Tuesday afternoon trading, to $9.40 per share.

E-mail [email protected]. Call (937) 528-4424.

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

Anja Murphy returns videos to a Redbox kiosk in an Albertsons supermarket in Santa Monica. Consumers rent DVDs using their ATM cards

They say the kiosks' cheap fees could hurt DVD sales, undermining economics that have long propped up the film business.
By Dawn C. Chmielewski
March 30, 2009

The hottest thing in movie rentals is as old as the Coke machine -- and just as red.

Redbox movie kiosks are popping up by the thousands in supermarkets, drugstores, restaurants and convenience stores around the country. The kiosks stock DVDs that rent for $1 a day, a remainder-bin price that is less than a cup of coffee at Starbucks.

For all the talk about the Internet, Wi-Fi and cellphones becoming the new gateways to watch movies and wiping out the corner Blockbuster, a ubiquitous vending machine the size of a refrigerator is becoming a growing concern to Hollywood.

Consumers are pulling DVDs out of the Redbox kiosks in record numbers, undermining longtime economics that have propped up the movie business -- and in the process triggered a backlash from a major studio that sought to cut off Redbox's supply of hot new DVDs.

"We have grown at a phenomenal pace over the last six years, and that growth is continuing, even in the midst of the recession," said Gregg Kaplan, chief executive of Oakbrook Terrace, Ill.-based Redbox Automated Retail. "We're not seeing anything that's slowing it down."

Redbox operates nearly 12,900 kiosks throughout the U.S. -- four times as many locations as Blockbuster Inc. -- and plans to introduce 7,100 more by the end of the year. Each machine holds as many as 700 DVDs and 200 movie titles.

Consumers rent a DVD from the machine using their credit or debit cards, which enables Redbox to charge an additional day's rental if the DVD is not returned within a 24-hour period. A typical kiosk can earn significant coin: about $50,000 annually in revenue per machine in operation after three years.

Blockbuster could be getting green with envy at Redbox. The Dallas-based movie rental giant started rolling out its own DVD-vending kiosks last summer and is testing dollar-a-night rentals at 600 stores, with plans to roll out the new pricing to 4,000 outlets.

"We have been watching very carefully as they have progressed," Blockbuster Chief Executive Jim Keyes said. "We think it is very consistent with what Blockbuster does, which is to provide convenient access" to home entertainment.

The discount DVD rental business worries Hollywood movie studios because of fears that it is undercutting DVD sales, which dropped 13% in the fourth quarter and were projected to fall at least 6% more in the first quarter, according to analysts.

DVD sales historically have been how the studios earn a profit on movies, because ticket sales are barely enough to offset production and marketing costs. Some studios believe that consumers will forgo buying DVDs if they have a cheap option to rent movies.

"You could make a bit of an argument that rental is cannibalizing [DVD purchases] in 2008, especially in a recession year, where everyone is watching their nickels," said Tom Adams, a video industry analyst.

The spread of Redbox's kiosks, coming as DVD sales started to decline, has triggered alarms within Universal Studios. Last year it sought to withhold DVDs from Redbox until 45 days after release to prevent competition with sales. When Redbox rejected the deal, Universal ordered wholesalers to cut off supplies. Redbox then sued Universal, alleging restraint of trade.

Universal has responded in court filings that it has the right to direct wholesalers to conform with the studio's marketing plans and determine when a motion picture ought to be made available to the public.

In the early part of the decade, when DVD sales were booming, Hollywood paid little attention to Redbox. At the time, the kiosks barely registered a blip on the screen. The company was owned by fast-food giant McDonald's Corp., which saw in the fragmented vending machine industry an opportunity to bring the same consolidation and conformity it brought to burgers, fries and shakes.

Market testing by McDonald's in 2004 showed that consumers were willing to use the vending machines, which crossed the look of a London phone booth with the retro functionality of a cafeteria automat, as a cheap and quick alternative to the video store. The kiosks caught on, especially in supermarkets, where they catch customers' eyes as they push their grocery carts through the checkout counters.

The combination of errands to fill the cupboard and rent movies, as well as the consistent flow of customers, turned out to be advantageous: By the end of 2005, Redbox reported that it was renting more than a million DVDs a month out of 1,200 locations.

"It's a regularity of traffic, and the biggest single place people are going after the supermarket is to their homes," Redbox's Kaplan said. "Consumers tend not to rent DVDs when they're not going home."

McDonald's, however, decided that vending machines were not part of its core fast-food business. It set up Redbox as a separate company and ultimately sold control of Redbox to Bellevue, Wash.-based Coinstar Inc., an operator of coin-counting machines, coin-operated games and kiddie rides that crowd the exit aisles of supermarkets (last month, Coinstar announced that it would acquire full interest).

Coinstar's strong relationships with supermarket operators soon had the Redbox kiosks springing up in chains such as Albertsons, Walgreens and even Wal-Mart, which accounts for 40% of DVD sales.

Coinstar does not disclose earnings for Redbox. But its automated DVD rental business, which includes the smaller DVDXpress kiosk operation, reported operating income of $73 million on revenue of $388.5 million in 2008. The company expects sales to nearly double this year to between $690 million and $750 million.

Video industry analyst Adams estimates that the kiosk rental market, which totaled $519 million last year, will reach $1.4 billion in five years -- or about one-fourth of Blockbuster's 2008 revenue.

"You could view that as directly competitive" with Blockbuster, Adams said. "It's a cheaper option, and during a recession people embrace it."

dawn.chmielewski

@latimes.com

Selling movies in retail store solution

Picture of new concept for selling movies on memory cards. Next week Mod Systems is expected to provide details of new solution. Toshiba and NCR are backers.

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Another Kiosk for Movies on Memory Cards
January 02, 2009 12:05 PM ET | David LaGesse

How movie kiosks might look
This is a look at a potential kiosk for downloading movies from Mod Systems. The company is backed by Toshiba and NCR and will detail next week how it sell music and movies through Internet-connected booths in retail stores.

Toshiba is expected to also demo decks that can play the movies on TVs. The flicks could be played through SD card slots, or through card adapters that plug into USB ports. Existing devices, such as TVs with USB slots, would need software updates to play the copy protected movies.

Here is the press release:

SEATTLE - September 25, 2008 - MOD Systems, an industry-leading provider of digital media delivery systems for retailers, today announced that Toshiba Corporation, NCR Corporation, and others, have agreed to invest $35 million, giving the companies minority stakes in MOD Systems.

The investment is part of an ambitious initiative to leverage breakthrough portable digital storage technology that offers the potential to revolutionize how consumers download movies, TV shows, music and other digital content at a wide variety of locations, and then replay it on multiple devices. The initiative will combine technologies developed by the companies, and is aimed at meeting the explosive demand for easier access to high-quality digital entertainment and other content.

Under the initiative, consumers will download digital content to Secure Digital (SD) cards and portable devices such as mobile phones through kiosks and other self-service devices deployed, integrated and maintained by NCR at retail stores, airports, quick-service restaurants and other outlets. Toshiba will develop dedicated set-top boxes for the service, and develop and market high capacity SD cards for the system, improving the speed of downloads in the future.

The kiosks and other self-service devices will use the MOD Retail Enterprise System for "multichannel" digital media delivery, which enables digital content to be managed and distributed securely using portable devices and portable storage media, including SD memory cards.

"Digital distribution of content to SD cards offers consumers a convenient, faster, more portable way to buy content and access and use their growing entertainment libraries," said Yoshihide Fujii, Corporate Senior Vice President and President and CEO of Digital Media Network Company, Toshiba Corporation. "We're very pleased to join with MOD Systems, an innovative company with unmatched expertise in digital content distribution systems. This investment is key to our strategy for migrating consumers to digital."

"This technology and initiative have tremendous potential," said Bill Nuti, Chairman and CEO of NCR. "We continue to see opportunities to extend our experience in self-service to promising new industries like entertainment. Our initiative with MOD Systems is designed to offer consumers one of the fastest, most convenient ways to access high-quality digital entertainment."

MOD Systems provides retailers with a complete digital media system for consumers to load entertainment to portable devices and storage media, or burn content to an optical format (CD/DVD). The MOD Retail Enterprise System, deployed with leading global retailers, supports all content types and distribution scenarios including manufacturing-on-demand, delivery in optical or digital format, and hybrid online and in-store systems. Video entertainment content will be provided by major and independent studios, which will provide approximately 4,000 titles at the launch of the service. Initial content downloads will be in standard definition, and the service may also be applied to downloads of high definition content in the future.

"Digital media has not been able to truly impact sales at retail and therefore has not become truly pervasive and accessible to all consumers," said Mark E. Phillips, CEO of MOD Systems. "Our goal of creating richer retail destinations for digital entertainment will be furthered with Toshiba and NCR as strategic partners. We are humbled and excited to have leaders in consumer electronics and self-service accelerate our vision for entertainment in retail."

About Toshiba Corporation

Toshiba is a world leader and innovator in pioneering high technology, a diversified manufacturer and marketer of advanced electronic and electrical products spanning information & communications equipment and systems; digital consumer products; electronic devices and components; power systems, including nuclear energy; industrial and social infrastructure systems; and home appliances. Toshiba was founded in 1875, and today operates a global network of more than 740 companies, with 198,000 employees worldwide and annual sales surpassing US$76 billion. Visit Toshiba's web site at www.toshiba.co.jp/index.htm

About NCR Corporation

NCR Corporation is a global technology company leading how the world connects, interacts and transacts with business. NCR's assisted- and self-service solutions and comprehensive support services address the needs of retail, financial, travel, healthcare, hospitality, entertainment, gaming and public sector organizations in more than 100 countries. NCR (http://www.ncr.com/) is headquartered in Dayton, Ohio.

About MOD Systems
MOD Systems provides retailers with a complete digital media system for delivering content to consumers. The MOD Retail Enterprise System enables consumers to fill portable devices and storage media, or burn content to an optical format (CD/DVD). The system also supports hybrid "multi-channel" online and in-store solutions. With an extensive entertainment catalog of video and music, and an interactive touch-screen kiosk, the system allows consumers to shop for and buy the entertainment they want in the places they already shop. http://www.modsystems.com/

# # #

MOD Systems is a trademark of MOD Systems Incorporated. NCR is a trademark of NCR Corporation. All product and company names mentioned herein may be trademarks of their respective owners in the U.S. and other countries.

For more information, press only:

Adrienne Lenhart, MOD Systems, (206) 453-9363, [email protected]

Justin Hall, VOXUS PR for MOD Systems, (253) 853-5151 x 234, [email protected]

Robert (Kelly) Kramer, NCR Corporation, (770) 623-7215, [email protected]

DVD Kiosks - Redbox expanding to 7-Eleven

News today that Redbox has signed agreement with 7-Eleven for installing its units in 2,600 stores.

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Redbox Enters 7-Eleven, Airports, Gas Stations

By Erik Gruenwedel | Posted: 16 Dec 2008
[email protected]

DVD rental kiosk operator Redbox has quietly begun installing units in 2,600 7-Eleven convenience stores nationwide, in addition to select airports and gas stations.

A spokesperson confirmed the Chicago-based company, which operates 12,000 kiosks, signed an agreement with 7-Eleven in November, with installation slated to continue through 2009.

“7-Eleven is testing the redbox program in a couple of markets, but has made no announcement about an expansion," said a 7-Eleven spokesperson.

Redbox also began offering 99-cent movie rentals at General Mitchell International Airport in Milwaukee, Nashville International Airport, and Gerald R. Ford Airport in Grand Rapids, Mich.

It also began service at convenience chain Maverick in Tennessee, Thorntons in Wisconsin and Maryland-based Royal Farms.

Universal Studios Threatens DVD Market

So you have finally created your business plan, invested your money and deployed your self-service dvd kiosks. And then Universal comes along and changes the rules...Goes without saying that trying to do business in the moving-target-world of entertainment and content rights world is tough. Redbox, DVDPlay and TNR are now all huddling up trying to come up with a strategy. And of course one of the rule changes is a revenue share for Universal.

Kiosk Operators Aim to Avoid Troubles With Uni
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By Chris Tribbey | Posted: 30 Oct 2008
[email protected]
DVD kiosk operators are looking to circumvent Universal Studios Home Entertainment’s new revenue-sharing policies, which have sparked a lawsuit from Redbox.

The studio’s new terms for kiosk operators would prohibit renting or selling Universal DVDs until 45 days after they first street; limit the number of Universal DVDs the kiosk operator can stock; and require kiosk operators to destroy Universal DVDs after they leave the kiosks, instead of being sold as used to consumers. The policy change would take affect Dec. 1.

Redbox has filed suit against the studio over the proposals, claiming they misuse copyrights and violate antitrust laws.

“Defendants will terminate Redbox’s two distributors [Video Product Distributors and Ingram Entertainment] if they continue supplying Redbox with Universal DVDs or providing other services to Redbox — unless Redbox forsakes its customers. …” the suit reads.

Fellow kiosk operators TNR Entertainment and DVD Play have both sought legal advice regarding the changes, and the presidents of both companies have expressed concerns about how they would affect their businesses.

“Our initial review of Universal’s policy change is that it will adversely affect [our] commitment [to consumers],” TNR’s president and CEO Tim Belton said.

Chuck Berger, chairman, president and CEO of DVD Play, said he’s concerned Universal is trying to “freeze out the kiosk channel.”

“We plan on having Universal titles in our kiosks,” he said, adding that DVD Play had been contacted by supplier VPD, which had been contacted by Universal. “We’d find a way to get those titles. We’re not going to deny the users what Universal wants to deny them, and that’s an affordable DVD rental option.”

Fred von Lohmann, an attorney with the Electronic Frontier Foundation, said he believes Universal’s new policies are a losing proposition.

“The word outrageous comes to mind,” he said. “And I think consumers should be the ones most concerned about this. If this is permitted, it’s hard to see how anyone would want to invest in these new businesses, if studios can go in and shut you down.”

Von Lohmann said nothing would stop kiosk operators from buying Universal DVDs at retail on street dates, or go through “a middle man,” yet the added costs and hassles would hurt. He called Universal’s new revenue-sharing terms “a very cunning strategy” but forecasts that they would lose the Redbox suit.

“It’s like back in the ’80s when they went after mom-and-pop video stores … it’s the same can of worms they’ve been working on since [VHS] and before that, Betamax,” he said. If Redbox wins, he added it could “undermine Universal’s ability to manage its copyrights.”

However, if Redbox fails and Universal prevails, “What would ever put pressure on Hollywood to bring prices down for things like video-on-demand? Nothing would.”

DVD Burner with Qflix

Dell is first out of the gate with Qflix DVD burner option. Teaming up with Sonic Solutions and Roxio. "With a Qflix DVD drive, creating your own personal movie library is simple. From your desktop, use Roxio Venue™ — a rich, user-friendly application — to connect directly to CinemaNow for easy purchase and download,"...Roxio hit the news the other day after it's old asset Napster was purchased by Best Buy.

Highlights

Video Technology - Streaming Netflix or Sony

New WSJ article from Walt Mossberg (one of our favorite writers) on his test of new internet-video adapters from Sony and from Rokulabs. He likes both and both have limitations. We suspect playing/viewing content is the mechanism the studios will always prefer (over a hard DVD). And hard to not like the idea of spending $100 to get our Netflix on our big 24" high def screens (or TV) while we complain about Outlook :-)

Sony and Roku Try
To Join TV to Web,
But No Merger Yet
August 14, 2008; Page D1

Perhaps the biggest disconnect in the digital landscape today is between the Internet and the TV set. Consumers have been buying big, new high-definition TVs in large numbers and, separately, are watching more and more video from online sources like YouTube, Hulu and iTunes. But the two trends have yet to merge. Despite the efforts of big names like Microsoft, Apple and TiVo, relatively few people are watching Internet video on their shiny new sets.
WSJ's Walt Mossberg reviews two devices that try to bridge the gap between web video and television. Roku Netflix Player and Sony's Bravia Internet Video Link do a commendable job of offering web video on TV, but still have problems.

Now, two more set-top boxes have been launched to try to marry the Internet and the TV. Both adapters, from Sony and Roku, worked well in my tests, but each has limitations. The problem is that one of the boxes supplies content from a wide range of Internet video sources, but only works on selected models of one brand of TV set; the other works on a wide variety of TVs, but only provides a single source of content.

Sony's adapter is the Bravia Internet Video Link. This is a $300 module that attaches to certain Sony HDTV models. It can either be set up beside the TV or snapped onto the back of the set. Once it's connected to your TV and to your home network for Internet access, a new menu appears on the TV allowing you a choice of videos from numerous online sources, including YouTube, Yahoo, Blip. TV, Sports Illustrated, AOL, Wired, and the Web sites of CBS, Showtime and more.

Setting up the Bravia Internet Video Link was straightforward, even though it involved a welter of cables. There is no built-in Wi-Fi -- you need either a cable or an add-on wireless adapter to connect to the Internet. The primary hookup to the TV is via a modern type of cable called HDMI, for High Definition Multimedia Interface.

I tested the Sony Link using the company's most unusual HDTV set -- a tiny, very costly model that uses a very thin, very vivid new screen technology called OLED, for Organic Light-Emitting Diode. This TV provided a spectacular picture, but it isn't required to use the Sony module. The Link works on many larger, more common Sony sets with more common screens. It just doesn't work on non-Sony TV sets.
[photo]
Sony
Sony's Bravia Internet Video Link adapter

The Sony module doesn't have its own remote control. It uses the one that came with the TV. This makes for an awkward experience, because there are no standard play and pause buttons, and various other buttons on the remote meant to do one thing on the TV may do another when watching Internet video via the Link module.

Also, I found some of the Internet content to be disappointing. Many of the items labeled "movies" on various Internet channels were really just trailers, and some content was stale. For instance, some baseball news videos on Yahoo were weeks old.

However, Sony plans to make one of its feature films, "Hancock," available through the Link module before it's released on DVD. More important, it will be adding access to Amazon's forthcoming video-streaming service, which promises to contain a wealth of full-length content.

The Netflix Player by Roku is much simpler. In fact, it was the simplest set-top box I have ever tested. It costs just $100 and does just one thing: It allows Netflix subscribers to view its movies and TV shows via the Internet on a television set instead of on a computer. It can't get you any other video content from the Internet.

The Netflix player is a small, plain black box that works with most TVs, not just digital or high-definition models. It connects using both old-fashioned cables, like the kind used by many VCRs and older DVD players, or an HDMI cable.

Read rest of article

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

Another point of view from Washington Post as they relate article from videobusiness on how video burning is slowing down. You might not think that with all the stories about 10,000 kiosks to be installed in Blockbusters. Reminds us of the 28,000 multimedia phones that British Telecom was installing, or the 10,000 VCOMs that 7-Eleven was going to install.

Rafat Ali
paidContent.org
Tuesday, August 5, 2008; 1:07 AM

Earlier today we wrote about DVD rental kiosks from Blockbuster ( NYSE: BBI) and Redbox's delayed IPO. Now, another variation on the theme, kiosks burning DVDs on demand, are not so in demand, it turns out. After the major studios OK'd the burn technologies last year, everyone expected large scale pilot and some roll outs this year, but it looks like those would now be delayed into 2009, reports VideoBusiness, in a detailed story.

Some of the troubles:-- Walgreen's has been forced to delay those tests until 2009 after TitleMatch, the kiosk company it was working with, has shut down. TitleMatch, which also had a deal with Chicago grocer Peapod, quietly laid off its entire staff May 30, the story says.-- Another player, Polar Frog Digital has pulled its kiosks from most retail locations after a year of pilot tests at airports, hardware stores and drugstores as it reworks its business model.-- Hewlett-Packard, which launched its centralized MOD business, sold its MOD factory but is continuing to offer back end MOD services through Trans World Entertainment..it did a tie-up with on-demand DVDs for Sony Pictures Home Entertainment primarily older and more obscure titles. Very long tail, but this isn't a kiosk-based service.-- MOD Systems, which is pilot testing music burning and downloading on kiosks in some Best Buy and Circuit City stores, is holding off on including video in its kiosks until it has major studio content.
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The issues: as one of the execs quoted in the story says: "old model of burning movies to DVD only wasn't profitable and was a solution for 'yesterday's problem,' rather than addressing the changing way people consume movies and music." These machines also require a significant upfront investment, something smaller companies can't do...others also blame a lack of major studio content for making it difficult to sign on major retailers. Also, more immediate issue: retailers are generally unwilling to try a new technology in the all-important fourth quarter.

DVD Burning-On-Demand Not So Much In Demand; Players Delay Plans - washingtonpost.com

DVD manufacturing-on-demand rollout delayed
Kiosk companies rework business plan
By Jennifer Netherby -- Video Business, 8/4/2008

AUG. 4 | Don’t expect to find many kiosks burning DVDs on demand in stores this fall.

Despite expectations of large-scale pilot tests and a commercial rollout this year of kiosks that would save retailers aisles of shelf space while offering thousands of movies and TV shows on demand, technical and economic challenges have led to a shakeup among DVD manufacturing-on-demand players that is likely to push most retail launches back into 2009.

Walgreen’s, which was expected to do a large pilot test at stores this year, has been forced to delay those tests until 2009 after TitleMatch, the kiosk company it was working with, essentially shut down.

TitleMatch, which also had a deal with Chicago grocer Peapod, quietly laid off its entire staff May 30 and is effectively out of the business after running out of money, according to a filing by parent company Protocall Technologies with the Securities and Exchange Commission.

Polar Frog Digital has pulled its kiosks from most retail locations after a year of pilot tests at airports, hardware stores and drugstores as it reworks its business model. The digital kiosk company has formed an exclusive partnership with technology company Nero for its liquid media technology. Nero’s technology will allow Polar Frog to make its kiosks one-stop shops where consumers can burn movies, TV, music and books to DVDs and CDs or download them to flash drives and USB devices, CEO Todd Rosenbaum said.

Nero’s technology includes CSS copy protection on burned DVDs and is based on open standards already adopted by the DVD Forum and major studios. The companies plan to license the technology to other kiosk players.

Polar Frog will roll out kiosks with the new technology this fall at college campuses, one of the few companies that will expand its reach in the second half of the year. The reconfigured kiosks will initially feature movie, TV and music downloads and DVD/CD burning. Polar Frog hopes to add downloads of textbooks and eventually burning of Blu-ray movies, though the latter is dependent on approval by the DVD Forum.

“We have all of these features that can be enabled when the timing’s right; we don’t have to reinvent wheels,” Rosenbaum said of the change.

Rosenbaum said its old model of burning movies to DVD only wasn’t profitable and was a solution for “yesterday’s problem,” rather than addressing the changing way people consume movies and music.

Execs at other kiosk companies say a major launch or pilot test of MOD kiosks won’t happen this fall, as retailers are generally unwilling to try a new technology in the all-important fourth quarter.

Meanwhile, Hewlett-Packard, which launched its centralized manufacturing-on-demand business with great fanfare last summer as a competitor to Amazon.com’s CreateSpace, is also said to be making changes. H-P sold its MOD factory but is continuing to offer backend MOD services through Trans World Entertainment, execs at other MOD companies said. An H-P spokeswoman said that the company is still in MOD.

Kiosk companies and technology partners blame a number of reasons for the setbacks.

“The business model’s a little tricky,” said Jim Taylor, senior VP and general manager of Sonic Solutions advanced technology group. Sonic licenses its Qflix technology to securely deliver films on demand through kiosks. “Some of the business models require a significant upfront investment. That’s tough for smaller companies. … Another [factor] is that the retailers are still trying to figure out how this fits with what they do.”

Polar Frog’s Rosenbaum said many retailers have been reluctant to pay to bring in kiosks, which are unproven at selling movies. Polar Frog had been providing its kiosks free to retailers, but going forward will only work with retailers that pay the cost to operate kiosks.

“The price to play in the game wasn’t worth the price of admission,” Rosenbaum said.

Others also blame a lack of major studio content for making it difficult to sign on major retailers. One exec said the major studios are reluctant to be the first to license content.

Rosenbaum said studios also are unwilling to license movies for kiosks that might be located in stores that already sell DVDs, fearing they might cut into disc sales.

Polar Frog is targeting retailers that don’t carry DVDs, and Rosenbaum said he is hopeful that the company will have two major studio deals in place this fall when it rolls out to college campuses. The company already has deals with independent suppliers Magnolia Entertainment and First Look Studios.

MOD Systems, which is pilot testing music burning and downloading on kiosks in a handful of Best Buy and Circuit City stores, is holding off on including video in its kiosks until it has major studio content, said executive chair and co-founder Anthony Bay.

Meanwhile, other companies are expected to enter the business. A group of former TitleMatch execs, some who exited before the layoffs, have joined another kiosk company, privately held Cenmere.

Sonic’s Taylor said he is still optimistic about MOD. The company is in talks with about 100 different players who want to get into the space, either through kiosks, in-home burning or another variation, he said.

“I’m still absolutely convinced that this business is going to take off,” he said.

Blockbuster and NCR Announce Strategic Alliance to Launch DVD Vending Kiosks

From 9,300 DVD rental kiosks at end of 2007 to more than 22,400 by end of 2010 is the latest forecast. Release today by NCR and Blockbuster on latest buzz. Still not sure how Blockbuster survives.

DALLAS and DAYTON, Ohio, Aug 04, 2008 /PRNewswire-FirstCall via COMTEX/ -- Blockbuster Inc. , a leading global provider of media entertainment, and
NCR , a global leader in self-service and assisted-service technology, have entered into an agreement to deploy Blockbuster-branded, state-of-the-art DVD vending kiosks in a pilot program that could be the first step of a national rollout of thousands of units.

The initial deployment of 50 Blockbuster-branded kiosks should begin in the third quarter of 2008 with all units expected to be installed by year-end. The pilot vending kiosks will initially offer DVD rentals, but the machines will allow for future applications, including digital downloads, and other services, such as sales of DVDs and video games. The companies have not announced the markets or site locations for the first units.

Earlier this year, Blockbuster and NCR announced an agreement to test digital movie downloading kiosks in select Blockbuster locations. The first of those units is expected to be installed in two Dallas stores this summer.

"With NCR's advanced technology, these machines will dispense a wide array of DVDs and could offer digital downloading in the future, all under the Blockbuster brand," said Jim Keyes, Blockbuster chairman and CEO. "This initial rollout provides consumers increasingly convenient access to their favorite movies and is one more step in the fulfillment of our mission to transform Blockbuster into a multi-channel provider of media entertainment."

"This alliance with Blockbuster is an exciting step for NCR as we pursue our mission of becoming the leader in the market for entertainment self- service solutions," said Bill Nuti, NCR chairman and CEO. "Looking beyond this initial deployment, our mutual goal is to have 10,000 kiosks installed within 18 months. We are energized and thrilled to be such an integral part of Blockbuster's strategy for providing consumers with greater choice and convenience."

Analysts are projecting DVD vending kiosks could grow by more than 60 percent over the next three years, increasing from 9,300 units at the end of 2007 to more than 22,400 by the end of 2010. Additionally, consumer spending on movies from vending machines during that same period is expected to grow from $197 million to more than $760 million.

Blockbuster and NCR Announce Strategic Alliance to Launch DVD Vending Kiosks - MarketWatch

Polar Frog Ready to Burn CSS at Kiosks

With all the recent hoopla on dispensing dvd's and related, another participant but one with dynamic content delivery onsite is Polar Frog and Todd Rosenbaum. He comes to closest to the Netflix paradigm albeit he provides consumer a hard asset as part of the transaction. Long term though these will win out.

Polar Frog Ready to Burn CSS at Kiosks
Author: CHRIS TRIBBEY
[email protected]
Posted: August 4, 2008
Email this Story to Friend

Polar Frog Digital, which currently has a dozen download-to-burn kiosks scattered across the United States, is aiming to add a whole lot more by the end of the year.

The company has partnered with Nero Inc. to bring Content Scramble System (CSS) encryption to its DVDs, which just might allay studio concerns that their content isn’t protected. Most every DVD currently on store shelves is CSS protected.

Now all Polar Digital needs is to convince retailers — and the studios — to try the kiosks on for size.

“Now we can deliver [our product] while protecting the digital rights of the industry,” said Todd Rosenbaum, CEO of Polar Frog Digital. “We’re endorsing the standards and we believe we have something unique: We’re the first to offer end-to-end solutions for MOD (manufacturing on demand).”

Polar Frog boasts more than 13,000 titles from more than 100 content owners on its kiosks, but doesn’t have a single major studio agreement. Besides questions over copy protection, studio representatives have said that retail support is key to them buying into any MOD system for consumers.

“Over the short-term, I don’t expect much impact on physical home media products,” said Kurt Scherf, VP and principle analyst with Parks Associates. “I expect that the download-to-burn kiosks are going to be used more by retailers as a way to phase out those bargain-DVD bins you typically see near the Walgreen’s check-out line. I’d expect that you’ll see older titles more on these kiosks than the latest Hollywood release.

“It’s going to take some time for the studios and the kiosk companies to experiment with the type of content they plan to make available through the download-to-burn efforts.”

However, he added, that title count is Polar Frog’s biggest asset, comparing it to the 500 or so rental DVDs available from Redbox, or the 7,000 to 10,000 DVDs on the shelves at Blockbuster.

“Once the studios get real data back on use, on how revenues compare to the distribution costs that they’re saving, etc., I think you’ll see more come on board, assuming the results are favorable,” he said.

The agreement is a result of the Sept. 20 decision by the DVD Copy Control Association to allow CSS to be licensed out. While Polar Digital and Nero aren’t the only involved in CSS-protected DVD MOD systems, they are the furthest along toward that dream of eliminating concerns over shelf space and sold-out new releases.

“We build and burn that DVD on the fly,” said Nero President Richard Carriere. “We’re at one of those points where we’re seeing a change in consumer buying habits. When you can deliver physical in a digital world, you address shelf space.

“ We are committed to liquid content creation anytime, anywhere and on any device. The experience of and ability to manufacture commercial released video DVDs on-demand, will revolutionize the retail industry.”

Currently a handful of Polar Frog kiosks are in Longs Drug Stores, and Walgreens earlier this year said it was interested in including the kiosks in its stores.

“Consumer awareness of self-serve is out there, but it has to start with volume,” Rosenbaum said. “[Thirteen-thousand titles] is great credibility to start with … . We look at this and see a 20% to 30% increase in DVD sales that can be augmented.”

Home Media Magazine | Polar Frog Ready to Burn CSS at Kiosks

DVDs for Gas? e-Play Kiosks Make It Possible

Bare-disc technology in the news today with e-Play and NCR announcement. Inventory goes from 500 titles in typical Redbox/DVDPlay/TNR to over 4200 titles. DVDs are in special envelope like Netflix Extra services such as ability to purchase the used DVDs and/or to trade in DVDs is touted advantage.

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DVDs for Gas? e-Play Kiosks Make It Possible
Author: Billy Gil
[email protected]
Posted: July 17, 2008
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An e-Play kiosk
Cash-strapped consumers facing high gas prices may soon be able to clear out their DVD catalogs for vouchers at Exxon Mobil gas stations.

Dayton, Ohio-based technology company NCR Corp. has entered an exclusive licensing agreement with Columbus, Ohio-based kiosk operators e-Play to add e-Play’s “bare-disc” technology to NCR-manufactured kiosks. The technology allows for storage of more than 4,200 discs dispensed in envelopes — and allows consumers to buy, rent or trade in their own DVDs at the kiosks for either store credit or a cash voucher.

“Someone [can] bring us a stack of DVDs from their living room [and trade them in],” said e-Play cofounder and CEO Alan Rudy.

Rudy said e-Play plans to buy many of the NCR kiosks and dispense them either as e-Play branded kiosks or as specific retailers’ kiosks, although NCR also has the right to sell its kiosks with e-Play technology to other buyers.

“The e-Play technology is a great complement and addition to the NCR Xpress Entertainment portfolio, which we launched earlier this year,” said NCR chairman and CEO Bill Nuti. “This agreement will further expand our portfolio of self-service entertainment solutions to include bare-disc as well as packaged DVD media, thus enabling NCR to offer our customers the flexibility to deploy the appropriate technology for their business strategy.”

Retailers currently utilizing e-Play kiosks include Exxon Mobil, Dollar Tree and GameStop stores in Columbus, Ohio; Atlanta; and Charlotte, N.C., according to Rudy.

“We expect before the end of the year to be able to exchange vouchers for gas at Exxon stations,” Rudy said.

Rudy said customization allows retailers to choose whether DVDs can be traded in for cash vouchers or store credit, and if the store credit would exceed cash amount. He also said current e-Play kiosks are being upgraded remotely to include the new technology.

Rudy said e-Play kiosks were originally made to include DVD burning, but licensing issues have made securing content difficult. Currently, kiosks will only allow for DVD rental, sellthrough and trade-in, with plans for digital distribution down the line.

The new kiosks aim to go after the big kiosk operators, such as Redbox, TNR and DVDPlay, Rudy said. The bare-disc technology allows for much greater storage capacity than Redbox kiosks, which hold about 500 discs apiece.

The new kiosks will use the dollar-a-day rental policy currently employed by such operators as Redbox and TNR. But the trade-in ability, and the ability to purchase any disc in the kiosk at a used-DVD price, will set e-Play kiosks apart, Rudy said.

“You may say ‘gosh, for $4.99, I’m going to buy that,’” Rudy said. “Compared to Redbox … we think we’re Redbox plus.”

Discs in the new e-Play kiosks are dispensed in scratch-resistant envelopes Rudy likened to those used by Netflix and Blockbuster Online. When discs are inserted into e-Play machines, the kiosks check for readability so that scratched discs are not bought back, and are not sold or rented to consumers.

“Sometimes [with standard rental] you take the disc home, you’re halfway through it and it just stops,” Rudy said. “[If a consumer doesn’t complain] the next consumer gets a scratched disc.”

Although there currently are fewer than 100 e-Play kiosks in operation, Rudy said the company plans to dispense “a couple of thousand” new kiosks over a year’s time. He said e-Play currently is in talks with several retailers, with special attention to convenience stores.

“We’re expanding as fast as we can manufacture,” Rudy said.

Motley Fool Shoots Down Blockbuster/Keyes Idea

We saw the article on readwriteweb about blockbuster but the writeup on Motley Fool is much much better analysis of why the video download kiosk announced by Blockbuster is much more likely to fail than to succeed. The incremental foot traffic is reasonable but also the alienation of customers that already feel like the video store continues to trudge towards obsolescence.

Willy Wonka and the Blockbuster Factory
By Rick Aristotle Munarriz May 29, 2008 Comments (2)
5 Recommendations
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Readwritearticle

Blockbuster (NYSE: BBI) CEO Jim Keyes is no Willy Wonka, but when the company took the wraps off its new kiosk at yesterday's annual meeting, shareholders were as starry eyed as Golden Ticket-clutching kids entering a realm of chocolate rivers.

Well, maybe they would have been, if this were still the 1990s.

The new development involves NCR (NYSE: NCR) machines that Blockbuster will begin testing at some of its stores. The machines will allow shoppers to dock their portable media players and download digital flicks in just two minutes.

A decade ago, this may have seemed like a bold futuristic push from a company on the cutting edge. Unfortunately, this is 2008, and Blockbuster's vision of the future seems as hokey as Disneyland's Tomorrowland or an episode of The Jetsons.

10 reasons this will fail
There are several things wrong with this approach. In fact, I can think of at least 10 before I start getting dizzy.

• The system will eventually work with most portable devices, but it's initially limited to Archos devices. Archos makes some cool gadgets, but do you know anyone who owns one?
  
• The Archos media players have Wi-Fi. Why am I trekking back and forth to Blockbuster when digital delivery can come to me? Apple's (Nasdaq: AAPL) iTouch, SanDisk's (Nasdaq: SNDK) Sansa Connect, and Microsoft's (Nasdaq: MSFT) Zune also have Wi-Fi capability, while video-streaming smartphones by Apple and Research In Motion (Nasdaq: RIMM) can just phone it in when they're not within Wi-Fi's reach.
  
• Speedy download times typically come at the expense of video compression quality. I thought the physical migration from DVD to Blu-ray happened because people cared about quality. How will these downloads look if I want to watch them in my home theater? Or am I limited to squinting at the small screen on my media player?
  
• I thought the purpose of winning foot traffic at the store level was to grow incremental impulse-item sales. Folks walking in to use an automated kiosk are unlikely to bother with conventional checkout lines.
  
• Blockbuster still needs to get all of the movie studios on board. Until then, it will only disappoint early adopters with a lack of selection.
  
• Won't this alienate disc-based renters? If I walk in and see a high-tech kiosk I can't relate to, I'll get the feeling that the old-school model is being phased out.
  
• The downloads may be quick, but folks will still take their time in choosing a digital rental. In other words, Blockbuster will need to have several of these kiosks in each store if they don't want to risk turning off users with long waits. The kiosks can't be cheap, either. I pity the fool who bankrolls them.
  
• How many CD shops are excelling at selling in-store downloads?
  
• Borders Group (NYSE: BGP) has shrunk in prominence since it teamed up with the Sony Reader to cash in on the e-book craze. Why will bridging the divide in video by a bricks-and-mortar chain pay off any better than it has in books?
  
• Perhaps more importantly, why is Blockbuster strapping training wheels onto its customers by tempting them with digital delivery? Doesn't it realize that its customers will see the light and just pedal away?

  One reason this may work
  The only reason this kiosk has a shot is that Keyes is calling the shots. He turned 7-Eleven around. He knows how to run a shop. The company's latest quarterly report bears that out, with Blockbuster's merchandising comps soaring 19.7% higher. When it comes to beefing up the company's video gaming initiatives or transforming it into a more mainstream entertainment retailer, there's no one else that I would want at the helm.

  But even so, the guy is biting off more than he can chew with these machines. They will take up space and confuse customers. They just won't be a win for Blockbuster. We live in a world of Veruca Salts, while Blockbuster is kicking the Charlie Bucket. Why can't Keyes see where this is heading?

  Posted by staff at 01:06 PM

Blockbuster unveils in-store kiosk prototype

NEW YORK (AP) — Blockbuster Inc. unveiled a prototype of an in-store kiosk for downloading movies at its annual meeting on Wednesday, part of its plan to transform into more than just a DVD rental chain.

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Blockbuster's proposed takeover of electronics retailer Circuit City Stores Inc. for just over $1 billion was only mentioned briefly during the meeting. Chairman and Chief Executive Jim Keyes said the company is still in the due diligence stage of considering a possible acquisition. He did not disclose when a decision will be made.

Keyes said acquiring Circuit City would be an "accelerator" of the company's strategy to grow Blockbuster's core rental business and enhance its product offerings of movies, games and entertainment gadgets.

"With or without Circuit City's acquisition, we think we have a terrific opportunity to transform our stores," Keyes said.

Billionaire investor Carl Icahn, Blockbuster's largest shareholder, did not attend the morning meeting. To lift concerns about Blockbuster's ability to finance the deal, Icahn has said he is prepared to buy Circuit City if all else fails.

The sleek prototype kiosk unveiled Wednesday is just one way that Blockbuster is looking to deliver movies digitally. The design, which Keyes said is likely to change with testing, offers a range of features to help customers make movie choices, including previews and recommendations. Keyes said the company is working to reduce the download time for movies to about 30 seconds.

The company is also working on allowing customers to download movies through set-top boxes or Internet Protocol television, or IPTV.

The kiosk prototype, which will begin testing within the next three weeks, was developed by NCR Corp. For the pilot launch, the kiosks will be compatible with an Archos portable device, but the company ultimately plans for the kiosk to be an "open system" and widely compatible with a range of devices.

The CEO noted that Blockbuster plans to rely on third-party partners to minimize the company's investment in these initiatives.

Keyes also said the company is still exploring alternative, simplified pricing structures for its rental service.

Earlier this month, Blockbuster said it swung to a first-quarter profit and saw a 2.9 percent jump in U.S. same-store sales. Chief Financial Officer Tom Casey said the company has continued to see improved same-store sales performance in April and May.

Also Wednesday, Keyes said shareholders elected all the company's board nominees, based on a preliminary vote tally.

Blockbuster shares dipped 2 cents to $3.32 in afternoon trading.

Technology - skip the DVD by mail and download direct

Preparing for the eventual extinction of its DVD-by-mail rental service, Netflix Inc. on Tuesday is introducing its first solution for subscribers who want entertainment delivered directly to their television sets with just a few clicks on a remote control.

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The breakthrough comes in the form of 5-inch-by-5-inch device tailored for a year-old service that uses high-speed Internet connections to stream more than 10,000 movies and TV shows from Netflix's library.

Although it is provided at no additional cost to most of Netflix's 8.2 million subscribers, the streaming service has had limited appeal so far because it doesn't include the latest movies and could not easily be watched on anything but a personal computer.

At $99.99, the Netflix set-top box is priced like a DVD player and is as simple to hook up to a television. A high-speed Internet connection can either be plugged into the box or the device can pick up a wireless signal.

Although the streaming device bears the Netflix brand, it's the brainchild of Roku's founder and CEO, Anthony Wood. After temporarily leaving his startup to work on the streaming device as a Netflix employee, Mr. Wood returned to Roku earlier this year. At that point, Netflix paid $6 million for an undisclosed stake in Saratoga-based Roku. Several other former Netflix employees also work at Roku.

Can the USB go from computer dork to Hollywood player?

DVD on USB - Practical USB device being thought of as new way to download and transport movies, 20-second download time and licensing options attractive to tech-savvy travelers, Strong competition from DVD kiosks and task of breaking movie-renting habits

Can the USB go from computer dork to Hollywood player? - CNN.com

(CNN) -- Foreseeing the future is a tricky business. Why, for instance, should Hollywood moguls have paid much attention when the USB standard emerged in the mid-90's?
art.usb.jpg

It simply made hooking computers to keyboards, printers and joysticks easier.

Nothing could seem further from their glitzy world. How times change.

Now USB ports are to be found in $300 portable video players and $3,000 50-inch plasma HDTVs.

And they accept flash memory devices, which have undergone a revolution in storage capacity -- storing a dozen movies is not a problem.

So in retrospect it was only a matter of time before entrepreneurs tried out this idea: public kiosks that allow consumers to download movies directly onto a USB memory device, to be watched later on their portable video players, computers, or TVs.

Today an Irish startup called PortoMedia has tested the idea in some home markets, and a few U.S. trial cities are to be announced shortly.

Business is being lined up in 30-plus countries, it says, and the service works equally well in Tokyo or small-town India. Its MoviePoint kiosk allows customers to download DVD-quality films in about 20 seconds onto its MovieKey, a USB memory device that costs between $20 and $100, depending on the storage capacity (from 2 to 15 movies).

The films are burned onto the MovieKey with the relevant license at the point of purchase, using Microsoft DRM (digital rights management).

Consumers have several options on the licensing front. Examples: the movie expires 48 hours from hitting Play, or you can play it three times within 30 days, or it never expires (in which case you've purchased it).

Now Hollywood is paying attention. A number of major studios have agreed to let their movies be rented through MoviePoint kiosks, and investors in the startup include some big-name film execs.

Sticking it to old movie-watching habits?

A 20-second download is fast, but changing habits takes time.

"Most consumers are used to browsing racks of the physical product, either on VHS or DVD," notes Marie Bloomfield, an analyst at Screen Digest. "This is a more pertinent issue than the time it takes to deliver the content."

PortoMedia might find encouragement -- or a threat -- in the rapid spread of DVD kiosks in the U.S., most notably the Redbox kiosks found in McDonald's, grocery stores and various retails locations.

These kiosks can hold several hundred titles, which cost about $1 per day to rent. Downside: customers must physically return to disc (though it can be to any kiosk, not just the one they rented from).

MoviePoint has some pros and cons compared to the DVD kiosks. Most notably, it can hold far more titles -- thousands as opposed to hundreds. And because it copies rather than dispenses these titles, there's never a problem with running out of stock.

"Think about the how much more responsive the content offerings can be if an obscure movie, for example, becomes really popular -- like the 'Napoleon Dynamite' phenomenon from a few years ago," notes Kurt Scherf, principal analyst at Parks Associates.

Another plus with MoviePoint is there's no need to return a movie, and no chance of late fees.

For someone in transit -- at the airport, for instance -- this is a real convenience. And travelers in general face the problem of video-rental stores requiring membership and a local address.

In the trials in Ireland, the ability to delay the rental period was one of the most popular features: the movie might expire 48 hours after you first hit Play, but when you first hit Play is up to you.

For retailers, kiosks using hard drives means not having to worry about packaging and shipping costs, as with physical DVDs. And of course the kiosks take up little space, which makes more room for other products.

"We used to have mom-and-pop video stores, and they got wiped out by the big chain video stores," notes Kim Gregson, a communications professor at Ithaca College in New York.

"Now mom and pop can compete in terms of variety and quality without sacrificing too much floor space in a small store."

Competing against other formats

There is also a new generation of DVD-burning kiosks allowing titles to be burned onto disc. These kiosks have the advantage of churning out something familiar: the DVD. Drugstore giant Walgreen is going with this approach for selling movies.

But MoviePoint works much faster: about 20 seconds compared to about 15 minutes.

On the down side, MoviePoint requires consumers to purchase extra hardware just to use it. They must buy the MovieKey. And if they want to connect it to a regular TV -- usually lacking a USB port -- they'll also have to buy a special dock (called MovieVault).

Compare that to the simplicity of just buying a DVD.

"If this thing is perceived as being even the slightest bit complex, it is likely doomed," believes Russ Crupnick, senior industry analyst for The NPD Group, a market research firm. "More consumers will likely prefer a disc."

MoviePoint probably has its best shot among early-adopters types who like being the first to try out new things. In the trials in Ireland, the MovieKey "became something to show off to their friends -- cool and simple," according to PortoMedia spokesperson Jacintha O'Donohoe.

Early adopters "can spread the word about the speed of download, as well as the quality and variety of the movies, to the later adopters," suggests Gregson.
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But she still thinks converting the later adopters will be a challenge given all the competition. This competition includes, for starters: DVD rentals at stores and kiosks, cable TV's video-on-demand, discs by mail as with Netflix, and cheap DVD purchases at places like Wal-Mart. Then there are the slightly more tech offerings.

Downloading movies hasn't really taken off yet, but these include online services like iTunes and Net-connected game consoles like the Xbox.

And then, of course, the iPod must be considered. It also uses the USB standard, of course. iPods seems perfectly suited for MoviePoint concept. They're familiar, widespread and can play video.

But, sadly for PortoMedia, they are "not compatible with any third-party digital content solution," notes Bloomfield.

"Given that Apple accounts for a sizeable chunk of the video handheld market, that reduces the addressable market considerably."

Of course, Apple might spread into the USB kiosk market on its own.

"But whether it would be interested in doing so is another matter entirely," says Bloomfield.

The company is doing just fine with iTunes, and Apple TV, which links downloaded content to regular TVs, has been made easier to use since its first release.

For PortoMedia and its backers, the competition, and the pros and cons of its system (the list goes on and on), are all familiar.

But for now, at least, the startup is in the spotlight of both Hollywood and Silicon Valley.

Its MoviePoint kiosk is a bit like a new film on the verge of global release: Whether it flops, attracts a cult following, or hits the big time remains to be seen.

Only one thing is certain at this point: Hollywood is no longer ignoring that boring old USB specification.

Coming soon: Movies on flash memory cards

The key to the service is a proprietary USB interface that transfers data at a faster average rate than standard USB devices. A standard-definition movie can be loaded onto a memory device in 8 to 60 seconds, depending on the length and chip speed. High-definition movies, which won't be available initially on the service, can be downloaded in 18 to 45 seconds. The USB interface works just fine with the USB slots on PCs and notebooks.

[print version] Coming soon: Movies on flash memory cards | CNET News.com

GALWAY, Ireland--PortoMedia is probably the only start-up in the world inspired by the movie Carlito's Way.

Company founder Chris Armstrong explains: Four years ago, he set out to his local DVD store to rent a movie. First, he stopped at the ATM to get cash. The store didn't have Twelve Angry Men, the movie Armstrong wanted. He settled for Carlito's Way instead. He then waited in line, paid for his rental, and returned to his car.

Then he remembered another movie, Gone in Sixty Seconds, the title of which got him wondering why the process of renting movies, from start to finish, can take so long.

While other companies see the Internet as the answer to that question, Armstrong has another idea. PortoMedia is setting up kiosks that will let consumers download movies to a flash memory key or portable hard drive.

The kiosks will be packed with hard drives that can hold 350 to 5,000 titles. Users then plug in a memory device from the company, enter a PIN code, and buy or rent a movie. When consumers get home, they simply slide the memory device into a dock connected to a TV.

The key to the service is a proprietary USB interface that transfers data at a faster average rate than standard USB devices. A standard-definition movie can be loaded onto a memory device in 8 to 60 seconds, depending on the length and chip speed. High-definition movies, which won't be available initially on the service, can be downloaded in 18 to 45 seconds. The USB interface works just fine with the USB slots on PCs and notebooks.
Flash key
Credit: Michael Kanellos/CNET News.com
PortoMedia's small flash key sits in the
company's discount dock. This hardware
will sell for around $50 in the U.S.

The company did a trial run in Dublin at the end of 2007, with plans to go live in four U.S. cities toward the beginning of the second quarter, though Armstrong declined to name the cities. Two retailers have signed on to put the company's MoviePoint kiosks in their stores.

More importantly, major studios have agreed to let the company rent standard-definition movies out of the kiosks, he said. Getting permission to build a library of high-quality content has been the bane of several would-be Blockbuster killers. Armstrong wouldn't divulge the name of the studios, but said they were major and well-known.

"We will have them (movies) the same day and date as DVD," he said. The pricing will be about the same.

Advantages over current models
If the company can pull it off--and that remains a big if--PortoMedia potentially can short-circuit some of the problems and shortcomings of the various methods for delivering movies. First up is cost. Delivering movies via hard drives and flash memory eliminates many of the packaging and shipping expenses associated with DVDs. Shelf space at retailers now dedicated to discs is also freed up for other products.

In addition, selection is improved. Most video outlets don't have 5,000 titles, he noted. Kiosks further let more companies into the video rental market. The kiosk version holding 350 titles will sell for around $2,000; it could be placed near the counter at convenience stores. Retailers will also be allowed to put their own brands on the box, so it could be hawked, for example, as "7-Eleven MoviePoint."

The time for viewing the rental won't kick in, he further added, until the movie is actually started, which lets the company copy the Netflix "no late fees" model but without monthly subscription fees.

Even more important, the system erodes the desirability of downloading movies. While great in theory, movie downloads have yet to become a big hit. Consumers have complained about long download times with some services, while others only let you watch a movie on a PC. PortoMedia rentals can be for one, or multiple viewings, depending on the fee and service selected. Because the company can control access to the box and makes the devices for downloading movies, viruses become less of a worry.

A physicist by training, Armstrong claims the Internet can't handle movie downloads anyway. He did the math on last year's release of Shrek 3. In the first three days, 11 million copies got sold. That's 66 petabytes of data.

Movies from PortoMedia can be watched on TVs or PCs. To prove his point, he transferred Spiderman from a portable hard drive to an iPod Touch. It took six seconds.

"And I didn't need permission from Apple to do that," he said.

But what about piracy? "It will never be perfect, but we are going to make it as hard as we can," he said. Movies rented from the service will comply with Microsoft DRM standards.
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If anything, the company has lined up legitimate technology partners. IBM helped it developed the transaction system. The drives come from Seagate Technologies (which has said for about a year that we will see video rental kiosks with hard drives), while Samsung provides the flash memory. Toshiba is fabricating the chips that make up the high-speed interface. Investors include former film execs like Jay Emmett and Lindsay Gardner.

PortoMedia's interface emphasizes sustained, rather than peak downloads. USB 2.0 can provide peak bandwidth at 480 megabits per second. "But I've never seen anyone achieve that and I'm in the industry," Armstrong said. Average speeds are far lower.

The company claims it can hit a sustained bandwidth of 95 megabits per second or higher. Some venture capitalists advised him to turn the company into an interface chipmaker that would license technology to other semiconductor manufacturers, but Armstrong decided to stick with movies.

The hardware will be sold in bundles with movies. The starter pack, which will sell for around $60, comes with a flash key, a dock, and six movies. At the high end, users can spend around $160 and get a handheld with a 1.8-inch hybrid hard drive with 240GB of storage, a fancier dock, and 12 movies.

DVD On Demand Demo by Nero at CES

Demo at CES by Nero of DVD on Demand station. Worth noting all of the "not currently under contract" and "in real operation it would do this" type comments as the demo guy points at devices "behind the counter". Doesn't really do a operational demo but just a scenario with lots of "and this would then do that..." remarks. My Nero

DVD Rental kiosk pilot by Blockbuster, and security liability

Nice catch by Gerba of Wirespring of blogger experience at new Blockbuster dvd rental "kiosk". Doesn't physically describe the "kiosk" so it might not be conventional enclosure/etc and judging from the comments it sounds more like an unsecured ordering terminal. Last year for their online signup program Blockbuster used bare laptops on a table for their "kiosks". With recent alerts on credit card theft on DVD rental machines you would think that they wouldn't put customer data at risk like this, but it was probably the cheapest solution...I wonder how much that "most cost-effective" network solution that TJ Maxx used last year ended up really costing them after all their data got swiped....Ended up being very expensive I think and created fear in consumers shopping in their stores still...

The maxim that the cheapest solutions come with the highest liabilities still holds true (and amazingly is most often ignored..).

Block Buster Express Kiosk - $1.00 Dvd Rentals

dvd blockbuster rental kiosk one dollarBlockbuster has jumped on the $1 rental bandwagon. A more common company of this type is Redbox. These ar ebasically ATM looking machines that despense dvd’s for $1.00 a night. Redbox has about 6,000 Machines in operation and blockbuster has recently released 14.

The first ever Blockbuster Express Kiosk is located just down the street to me. I decided I would try it and see how it worked. I wish I had my camera. When I arrived to the kiosk the tech i guess forgot to unplug the Keyboard and mouse as they were laying on the floor. The computer guy in me decided to see what was under the hood. Two keys later i was looking at a Windows XP desktop with Admin privelages. How can it be? Blockbuster, Do you not realize what I could do if i was a ambitious hacker? If you dont let me tell you.

If Blockbuster isn’t careful, I could:
* Despense DVD’s for free
* Add a back door to get access to all the creditcard information that is swiped on this machine
* Replace the “Play Trailer” videos with a more adult video of my choosing
*Add a rootkit, so that even if the machine is re-imaged, I will will have a backdoor.

These are just SOME of the things we could do. How about we take the code for the Machine, figure out how the kiosk’s talk to each other and add a trojan to install rootkit on All the kiosks that connects to the main server hub. From there, We could say, Put in the name nich duncan under the account, and get free rentals at all the kiosks or get even more malicious and Swipe credit card information from ALL KIOKS.

It’s a good thing i’m not a bad guy, otherwise blockbuster would be all over the news for losing customers creditcard infomation, missing dvd’s and all sorts of bad mojo. Now, I did call the customer service number and told them about this small error in their ways, they assured me they would send a tech to remove the keyword and mouse, which they did. The next day when i went, they were gone, But i decided to look around, On the back of the monitor is where the Computer is attached. All ports are open and avialble.

You have got to be kidding me blockbuster, You really left me a spot to plug in my own keyboard? So I called back and told them this is not satisfactory, this time I spoke with a supervisor and told them, I know they are testing the market, so i wanted to share some incite on what i thought of the machines. I explained the keyboard incident, then told them If I was so inclined I could just plug in my own since they leave the ports there for anyone to access, and I went on to tell them what I could do with just a keyboard if I was so inclined.

That was yesterday, Today when I went to return the dvd’s from yesterday. The tech was there replacing the monitor with a different brand. Looks like they took my advise to heart and realized the issues they could have had.

Related Link - Was the TJX fiasco result of poor wireless security or somebody breaking into a job hire terminal?

Manufacturing on Demand or MOD

Sony becomes first studio to enter the MOD business. In this case DVD Manufacturing on Demand. And they inked the deal with HP.

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Sony pacts with Hewlett-Packard for manufacturing-on-demand
By Jennifer Netherby -- Video Business, 1/24/2008

JAN. 24 | Sony Pictures Home Entertainment has inked a deal with Hewlett-Packard to make smaller films from its library available through DVD manufacturing-on-demand, making the studio the first major to enter the MOD business.

Terms of the deal, announced today by both companies, were not disclosed. Sony said it is still reviewing which titles will be offered through MOD but said it’s possible some deeper catalog titles that have never made it to DVD because of low demand will get a release.

“H-P’s MOD service provides us with a viable means of delivering a broader range of niche and library product to consumers,” SPHE president David Bishop said. “We know there is strong consumer demand for these titles, and by working with H-P, we may now monetize our deep product library and enable retailers the opportunity to bring a wider offering of Sony Pictures’ product to consumers without a significant investment in inventory.”

Through its DVD MOD business, H-P presses a disc when a title is ordered, allowing suppliers to offer deeper catalog films that don’t usually sell enough to score shelf space at retail or warehouse space at distributors.

Amazon similarly runs a DVD-on-demand publishing business, CreateSpace (formerly CustomFlix), which has deals with TV networks including CNN, NBC, CBS and A&E Networks to create DVDs of certain programs on demand.

In addition to Sony, H-P has DVD MOD deals with more than 40 suppliers, including Arts Alliance America, First Look Studios and Gaiam Americas to publish more than 5,000 movies.

H-P Digital Content Services VP of business development Doug Warner said the company views DVD MOD as the most immediate growth area for home entertainment.

“In our view, only centralized manufacturing does not require a change in consumer behavior—all the others do—so that is where we’ve decided to focus our energy,” Warner said.

The company had operated a movie download service for Wal-Mart, but exited that business in December because of little consumer interest.

The company estimates that of the 70,000 movie and other types of content released on DVD, only a small percentage is actually in circulation, something it hopes to remedy with its MOD business. H-P estimates the industry loses $500 million each year in sales due to product being unavailable when a consumer tries to purchase it online.

H-P believes smaller titles that studios and other suppliers haven’t released on DVD could add another $1 billion to $1.5 billion in annual sales.

The company wouldn’t say how many copies it sells of a typical on-demand title. But most on-demand content sells a small number of units as it has niche demand.

H-P is in negotiations with other studios to offer on-demand content, as well as video distributors and retailers. It has a deal with Trans World Entertainment, which sells MOD titles on Web sites FYE.com, SamGoody.com and Suncoast.com.

Under H-P’s deal with Sony, Sony chooses where its product will be sold. Sony senior VP of strategic development Jason Spivak said the company plans to offer its MOD releases to all retailers.

“Our hope is that retailers will embrace the service as both an economical form of distribution and a complement to what they keep in their physical inventory,” he said.

DVD Kiosks - Blockbuster shares slide

Nice story on Bloomberg on how $1 rentals from grocery stores are beginning to impact Blockbuster (which tries to rent the same movie for $3 more next door). Revenue to fall from $5.5B to $4.9B as a result (ouch...). Share price is down 40% in 2007.

Bloomberg.com: Invest

Blockbuster Share Slide Quickens on Growing $1 DVDs (Update3)

By Ari Levy and Josh Fineman
Enlarge Image/Details

Dec. 5 (Bloomberg) -- McDonald's Corp.'s $1 menu offers more than burgers, chicken nuggets and fries. Diners can now rent hot DVDs such as ``Shrek 3'' from automated kiosks for a buck, $3 cheaper than at Blockbuster Inc. stores.

Blockbuster, the largest video chain, and Netflix Inc., the biggest U.S. mail-order movie service, are losing sales to discount kiosks in an overall market that hasn't grown since 2001, said Adams Media Research. Adams estimates Blockbuster has 39.2 percent of the U.S. rental market, including franchised outlets.

According to a Bloomberg calculation, revenue at Blockbuster will fall to about $4.9 billion in 2011 from $5.5 billion in 2006, assuming its share of store and subscription sales stays the same. ``We're not going to speculate on our business looking several years out,'' said Blockbuster spokesman Randy Hargrove.

``The store business is about to face some further competition from the kiosks,'' said Tom Adams, who has tracked the movie-rental business since 1984 and is president of Adams in Carmel, California. ``What $1-a-night kiosks appeal to is the lower income group or just the extremely thrifty crowd.''

Blockbuster is already heading toward three straight years of declining sales. The Dallas-based company's third-quarter gross margin, or the profit left after subtracting the cost of goods sold, narrowed to 53.9 percent from 56.6 percent a year earlier.

`A lot of threats'

``They have a lot of convincing to do with investors to let them know that in the next five years'' the company will still be viable, said Stacey Widlitz, an analyst with Pali Capital in New York. She has a ``hold'' rating on Blockbuster shares and doesn't own them. ``There are a lot of threats out there that Blockbuster has to address.''

Blockbuster's stock, down 40 percent in 2007, has plunged 89 percent from its record in 2002. Movie Gallery Inc., the second-largest U.S. video-rental chain, filed for Chapter 11 bankruptcy in October.

Blockbuster fell 14 cents, or 4.2 percent, to $3.18 at 4:02 p.m. in New York Stock Exchange composite trading. Netflix rose 18 cents to $23.93 in Nasdaq Stock Market composite trading and has dropped 7.5 percent.

Sales growth at Los Gatos, California-based Netflix may slow to 8 percent in 2008 from 46 percent last year, according to the average analyst estimate in a Bloomberg survey. The company has cut prices to try to win customers who rent movies on the Internet.

Albertson's, Safeway

About 9,000 DVD kiosks, which are the size of soda-vending machines, rent new releases at Albertson's, Safeway Inc., Walgreen Co. and the Golden Arches. By year-end, about 10,000 will be operating in North America, according to company estimates.

``It's convenient, and it's cheap,'' said Christian Yansens, 28, after renting three movies, including ``Transformers,'' at an Albertson's store in Irvine, California. ``Albertson's is open 24 hours a day so you can get a movie at any time.''

Yansens said he stopped renting from Blockbuster when he found the same films for less than a third the price at the supermarket.

Redbox Automated Retail LLC, co-owned by McDonald's and Coinstar Inc., and closely held DVDPlay Inc., based in Campbell, California, install the kiosks, sharing the revenue they generate. They don't disclose terms of the agreements. The companies also avoid the costs of opening and managing stores, which account for about three-quarters of Blockbuster's operating expenses, according to Arvind Bhatia, an analyst at Sterne Agee & Leach Inc. in Dallas. Blockbuster doesn't break out store expenses.

Sales Growth

DVDPlay Chief Executive Officer Chuck Berger predicts the kiosks will garner up to 25 percent of the DVD rental market by 2011. With each machine generating annual sales of $30,000 to $40,000, the kiosks should top $270 million in revenue next year, or 3.4 percent of the DVD rental market, Adams said. There may be 50,000 in North America in five years, based on growth estimates from Redbox, DVDPlay and TNR Entertainment Corp., the three biggest companies in the industry, lifting total sales to between $1.5 billion and $2 billion.

Amid the expansion, Netflix's third-quarter gross margin fell to 33.9 percent from 38 percent a year earlier.

The kiosk business is ``not terribly competitive with ours,'' Netflix CEO Reed Hastings said in July. ``Mostly it negatively impacts stores'' because Netflix is less reliant on new releases.

Still, DVDPlay's Berger said he sometimes meets people who say they've dropped a Netflix account since discovering the vending machines.

Blockbuster kiosks

Blockbuster last month started testing 10 kiosks in Papa John's International Inc. and Family Dollar Stores Inc. in Lexington, Kentucky.

``There is nothing to stop us from going into the supermarket next door'' with our own box, Blockbuster CEO James Keyes said.

Kiosk operators have a head start. DVDPlay started developing hardware and software in 1999 to run unmanned kiosks and Redbox began testing its first prototype in 2002. Maintenance and signage changes are mostly outsourced to local companies. Redbox is the biggest vendor with 6,000 machines, followed by Houston-based TNR, owner of The New Release kiosks, with 2,100, and DVDPlay, which has 1,100.

``We don't think any company can easily replicate'' the model overnight, said Gregg Kaplan, CEO of Oakbrook Terrace, Illinois-based Redbox.

DVDPlay, which charges $1.49 for the first night's rental and $1 each subsequent night, will be profitable next year and may sell shares to the public in late 2009, Berger said. TNR CEO Tim Belton said he's talking with several potential partners and may eventually be able to almost triple his company's kiosks.

``A buck a day is just a really great value proposition,'' he said.

To contact the reporters on this story: Ari Levy in San Francisco at [email protected] ; Josh Fineman in New York at [email protected] .

DVD Kiosks - Blockbuster and Papa Johns Trial in Kentucky

Blockbuster tries $1 DVD rental machines in Papa John pizza stores. How effective or impact for the company bottomline these machines will be installed in rural areas is tough to see. Now if we could get that pizza delivered like we already do but also with a DVD, now that might be interesting...

Blockbuster tries out video rental kiosks - Los Angeles Times

Blockbuster tries out video rental kiosks
November 22, 2007

Blockbuster Inc. has begun testing movie rental kiosks at Papa John's pizza outlets and Family Dollar stores. Movies at the kiosks will be available for $1, substantially less than the cost for rentals at regular Blockbuster stores.

The Blockbuster Express kiosks, which are about the size of a vending machine and hold 250 movies, are in three Papa John's International Inc. locations and seven Family Dollar Stores Inc. outlets in the Lexington, Ky., area, said Karen Raskopf, a spokeswoman for Blockbuster.

The kiosks may help Blockbuster fend off DVDPlay Inc. and Redbox Automated Retail, jointly owned by McDonald's Corp. and Coinstar Inc. The two companies have lured customers from Blockbuster and Movie Gallery Inc. movie rental stores by offering $1 DVD rentals at supermarkets, drugstores and McDonald's restaurants.

"It's a natural affinity," Papa John's Chief Executive Nigel Travis said. "You are seeing a consolidation of food and entertainment. It definitely drives traffic."

Recently released DVDs typically rent for $4 for five days at a Blockbuster store. The $1 DVD rentals can be returned to any Blockbuster Express kiosk, not just the location where the movie was rented, Raskopf said.

Blockbuster also is testing kiosks in fast-food restaurants and other unspecified stores around the U.S., Raskopf said. Papa John's, which will have three kiosks in rural towns in another state, said customers would be able to rent the movies when they pick up carryout orders. They can't get the $1 rental when ordering pizza that will be delivered.

Shares of Dallas-based Blockbuster fell 11 cents Wednesday to $3.76.

Blockbuster is considering kiosks and vending machines where customers can rent movies or burn copies directly to a DVD, Chief Executive James Keyes has said.

"We think vending is probably the fastest-growing segment right now," Keyes said in an interview this month. "The next bigger trend is for vending, and we are well positioned to be able to play through an electronic kiosk."

Papa John's, based in Louisville, Ky., has linked pizza with DVDs before, with promotions in the last two years with films such as "Spider-Man 3." The chain wants to see if the kiosks help increase the number of customers, Travis said.

Blockbuster is seeking to boost in-store sales as the number of ways consumers can obtain movies has increased. Customers can rent DVDs online at Netflix Inc. and have them delivered by mail, download TV shows at Amazon.com Inc. or watch video-on-demand through their cable provider.

Blockbuster tries out video rental kiosks - Los Angeles Times

Walgreens says it will do DVD burning

"We hope to launch DVD-burning kiosks in the next few months. We think its a type of solution that will work very well in our stores, giving us the ability to provide a virtual inventory to a diverse customer base," said Tiffani Bruce, a spokeswoman for Walgreen, the nation's largest drugstore chain, with more than 6,000 stores.

Walgreen sees movie-burning DVD kiosks at stores
Sun Oct 28, 2007 3:40pm EDT

By Sue Zeidler

LOS ANGELES (Reuters) - Walgreen Co

Recent change in copy-protection rules governing DVDs have freed Walgreen and other retailers to tap this new movie market by letting consumers burn digital copies onto blank discs at stores, industry watchers said.

Walgreen and CVS have tried to attract more customers in recent years by offering improved digital photo kiosks, in- store health clinics and exclusive merchandise.

For studios, the kiosks add to revenue, particularly from older and more niche content selections, without having to manufacture, ship and store them.

"We hope to launch DVD-burning kiosks in the next few months. We think its a type of solution that will work very well in our stores, giving us the ability to provide a virtual inventory to a diverse customer base," said Tiffani Bruce, a spokeswoman for Walgreen, the nation's largest drugstore chain, with more than 6,000 stores.

Last month, the DVD Copy Control Association, a group of movie studios and hardware makers that oversees the copy protection system for DVDs known as Content Scramble System (CSS), moved to allow its technology to be licensed more broadly, opening the door for DVD-burning kiosks.

Now Walgreen is working with Hollywood studios and consumers will be able to make DVDs in about 15 minutes.

"We believe it could right for most stores," Bruce said.

Walgreen and other retailers are working with Sonic Solutions (SNIC.O: Quote, Profile, Research), which released software based on the recently approved industry specifications last month.

Sonic said consumers or retailers need special DVD burners and recordable discs to use its Qflix software, which also paves the way for download services from companies such as Amazon.com Inc (AMZN.O: Quote, Profile, Research), Wal-Mart Stores (WMT.N: Quote, Profile, Research) Inc and Blockbuster Inc's (BBI.N: Quote, Profile, Research) Movielink.

These services and Apple Inc's (AAPL.O: Quote, Profile, Research) iTunes now mostly let users watch films on computers or devices such as iPods.

"The burning capability is a perfect complement to our Movielink download business, because it will eventually enable consumers to store movies on their hard drives or DVDs for future usage," said Blockbuster spokesman Randy Hargrove.

He said Blockbuster would examine kiosks.

Rest of story

Movie DVDs at Kiosks

Opening doors for DVD-burning kiosks. One of the earliest licensing programs will come from Sonic Solutions Inc., of Novato, Calif., which is offering a copy-protection program called Qflix designed for burn-to-order DVDs. They are working to license it to DVD kiosk makers such as Polar Frog Digital LLC, which makes MediaIgloo kiosks. MediaIgloo in turn hopes to make deals with the major studios to acquire rights to their films. Retailers including Walgreens already have plans to install in-store movie kiosks.

Movie DVDs Sold At Kiosks Get a Boost - WSJ.com

Movie DVDs Sold
At Kiosks Get a Boost
By SARAH MCBRIDE
September 27, 2007; Page B4

A change in copy-protection rules governing DVDs is likely to quickly unlock a new market for selling movie discs via kiosks, where digital copies can be burned onto blank DVDs on the spot.

Retailers have been hoping to roll out such operations, giving instant access to thousands of movie titles that otherwise might be impractical to stock. But such plans have been tripped up by restrictive copy-protection guidelines. Some "on demand" burning is currently available, but it mostly involves independent titles.

Now, an organization called the DVD Copy Control Association -- a consortium including movie studios and hardware makers that oversees the copy protection system known as Content Scramble System, or CSS -- says it will allow its technology to be licensed more broadly. That opens the doors for DVD-burning kiosks.

One of the earliest licensing programs will come from Sonic Solutions Inc., of Novato, Calif., which is offering a copy-protection program called Qflix designed for burn-to-order DVDs. They are working to license it to DVD kiosk makers such as Polar Frog Digital LLC, which makes MediaIgloo kiosks. MediaIgloo in turn hopes to make deals with the major studios to acquire rights to their films. Retailers including Walgreens already have plans to install in-store movie kiosks.

Having the big-studio content should help drive traffic to the kiosks, says Jim Taylor, senior vice president and general manager of Sonic's advanced technology group. "You need more compelling, topical studio content to get eyeballs there in the first place," he says.

For studios, embracing the kiosks allows them to tap into their back catalog without having to produce and physically store DVDs.

Rest of story

Primera and Sonic Partner on Disc on Demand

Primera signs on with Sonic and CSS/Qflix. Impact of this is that major studios are not going to let their content be inappropriated transcribed and the CSS/Qflix ensures that the quality of the content is 100% consistent. It's an important alliance for sure in the DVD burn world.

Primera - News about Primera Asia Pacific

Primera® Collaborating with Sonic to Enable DVD on Demand Solutions at Retail

New Systems to Expand Title Inventory with ‘Virtual’ Movie Shelves

PLYMOUTH, MN, USA (September 27, 2007) — Primera Technology, Inc., the world’s leading developer and manufacturer of CD, DVD, and Blu-ray Disc duplication and printing equipment, today announced it is collaborating with Sonic Solutions to provide enabling hardware solutions for new, ‘disc-on-demand’ retail kiosks. To incorporate CSS recording capabilities into their automated disc publishing systems, Primera is participating in the Qflix ™ technology and IP licensing program administered by Sonic. With Qflix, Primera’s automated systems are able to record discs on demand that offer compatibility and security similar to mass-produced titles. Discs are produced at the time a customer’s order is placed through a touch-screen display at the retail counter or at a stand-alone, self-serve kiosk.

In a typical installation, hundreds and even thousands of movies, television shows, and special-interest titles can be made available for purchase. The entire system takes only a few square feet of counter space, and discs can be produced in just minutes each.

“Primera is thrilled to be providing a reliable, yet affordable on-demand, in-store DVD disc publishing system,” said Mark D. Strobel, Vice President of Sales and Marketing at Primera Technology. “It is exciting to be partnering with Sonic and contributing to this ground-breaking method of content distribution that will create a unique retail shopping experience for consumers.”

Complete burn and print systems from Primera sell for $1495 (MSRP) to $6995 (MSRP).

“Primera is an excellent addition to our roster of Qflix licensees delivering a well-crafted solution that will help retailers take advantage of this new form of electronic distribution to broaden their entertainment offering by augmenting traditional retail product with a vast ‘virtual’ inventory,” said Jim Taylor , senior vice president and general manager of Sonic Solutions' Advanced Technology Group.

Primera’s disc publishing systems and the Qflix ™ recordable CSS program are based on the recently approved industry specifications for recording electronic downloads set by the DVD Copy Control Association (DVD CCA).
About Primera Technology

Headquartered in Plymouth , Minnesota , Primera Technology, Inc. is the world’s leading developer and manufacturer of CD/DVD/BD duplication and printing equipment. Primera is known for its award-winning Bravo line of CD/DVD/BD publishers including the world’s best-selling Bravo SE, Bravo II, BravoPro and Bravo XR-Series Disc Publishers (Disc Publisher SE, II, Pro and XR-Series in Europe and Scandinavia ).

More information about Primera, its history and products is available on the Internet at www.primera.com or by calling 1-800-797-2772 ( USA and Canada ). Outside of the USA and Canada , call (763) 475-6676 or FAX (763) 475-6677. E-mail to [email protected]. In Europe and Scandinavia, contact Primera EUROPE in Germany by phone at +49 (0) 611-92777-0, by FAX at +49 (0) 611-92777-50 or by e-mail at [email protected]. In Asia Pacific, contact Primera Asia Pacific by phone at +852 3180 7171, by FAX at +852 3014 7827 or by email at [email protected].

About Qflix and Sonic DVD-on-Demand

Qflix offers a new means for content owners to release titles for custom production and sale over the Internet while maintaining the same level of copy protection used on commercially mass-produced DVDs. Sonic’s Qflix licensing program provides essential technology and IP for both the professional and consumer markets. Qflix Pro, for professional and enterprise manufacturing of DVDs “on demand,” allows production facilities to reduce the cost of carrying physical inventory while simultaneously offering extensive catalogs of content. Qflix Pro also enables retailers to broaden the number of movies by augmenting physical product with on-demand DVD creation kiosks in their stores. The consumer version of Qflix provides a long-awaited downloading and burning solution for movies and premium video content in computers and consumer electronic devices such as set-top boxes, networked DVD recorders, and DVRs.

Sonic DVD-on-Demand is a complete solution for custom preparation and burning of DVDs in industrial, retail, and home environments. Sonic’s Extensible Media Protection Architecture (XMPA) includes extensive Qflix support to enable secure electronic delivery and burning of video encrypted with CSS (the industry-standard Content Scramble System) to recordable DVD media.

For more information regarding the Qflix technology licensing program, please contact Qflix Licensing ([email protected]) or visit (www.qflix.com).

Notes to Editors: Bravo is a trademark and Primera is a registered trademark of Primera Technology, Inc. All other trademarks are the property of their respective companies. Primera Technology EUROPE is an independent company called DTM Werbung & EDV GmbH. DTM is under contract with Primera to provide sales and support for Primera products under the name Primera Technology EUROPE.

Kiosk-to-hard-drive video movie rentals

France-based video rental operator Cinebank plans to launch a new movie rental service in partnership with Archos called Moovyplay. The idea is simple, if not a little strange: customers will use special portable hard drives to download movies from store kiosks.

source link click here

The service is planned to launch in France in October, and if the test goes well, the company and its partners plan to launch Moovyplay in the rest of France next spring, then work on other regions. The plan is to eventually expand throughout Europe and even to the US, but only if it can succeed first in France.

The concept behind Moovyplay is strikingly similar to one that has been talked about in the US—store-based kiosks that download movies and burn them to DVD for customers to take home and watch. Moovyplay's movies would only be available as rentals, however, which will only be active for 30 days before becoming "inaccessible." But given how easy it has been to crack AACS, for example, it's pretty safe to assume that whatever DRM is chosen for Moovyplay's rental system will also eventually be hacked to bits, too, if it gains popularity.

The 14GB drives will be provided by Archos, the makers of digital media players, which the company says can hold 30 to 40 standard definition movies. The drives will be sold along with a docking station and HDMI cable for €140. In its announcement, Archos lauded the fact that the HDMI-equipped device could be hooked up to a TV without additional equipment. It's unclear whether users will be able to transfer data to the drives from their PCs. Such a feature would certainly be a big plus, but the movie studios would rather stab their own eyes out with sporks than allow users to that much access to the video files.

Pierre Cerisier, CEO of video buying group GDS, told Video Business that Moovyplay kiosks would be able to transfer movies quickly to the drives—six movies in about 90 seconds. Those are clearly standard definition movies.

According to Cerisier, Moovyplay has inked deals with nine French movie distributors and has made agreements with Warner Bros. and New Line Cinema to offer their titles for rental. It is also "in talks" with the other major US studios, although the service will not be available in the US just yet. "We wouldn't roll it out there ourselves," Cerisier told Video Business. "We would license the technology to someone who wanted to do it there. We just want to maintain the bank and manage the financial transactions, not operate all the equipment."

The company has not discussed details on how many movies will be available upon launch or how much each movie rental will cost. But even if both of those variables were favorable, the service still presents an inconvenience to users. How many users would choose to go to a store to download a movie from a kiosk when they could have the content delivered—either digitally or via the good old snail mail—to comfort of their own homes?

KIOSKS Case Study -- RFID and DVD Dispense

Grocery Stores Use RFID to Dispense Rental DVDs. Self-serve kiosks employ passive 13.56 MHz tags to dispense and track the discs that customers rent and return.

source link

April 18, 2007—Touch Automation, a Milwaukee-based provider of automated dispensing equipment, is using RFID technology in CD and DVD rental kiosks installed in stores. Within the past two years, the company has deployed at least 1,000 merchandising systems designed to provide customers the rental DVDs of their choice. Most of the installations have taken place within the past six months.

Unlike other automated disc rental machines, this solution uses RFID, rather than bar coding, to keep track of the discs checked into and out of the machines by customers. "The concept of utilizing RFID in this rental environment is new," says Brian Fitzpatrick, Touch Automation's director of engineering. Retailers can monitor and validate RFID-tagged CDs and DVDs entering and leaving the machine more accurately than they could with dispensing systems that used bar-coded labels to track the discs. Bar-coded labels are more susceptible to damage and can be read only if a bar-code scanner has a clear line of sight with the label.

The Touch Automation system allows customers to rent CDs and DVDs using RFID-enabled kiosks installed in stores.
Touch Automation machines, installed in retail locations across the country, are most commonly found in grocery stores. In most cases, the self-serve kiosks are owned and operated by private CD and DVD rental companies that have entered into hosting agreements with the grocery stores to lease space and/or provide a percentage of revenue from the system. Other grocery stores own and operate the system themselves. Either way, the kiosks allow customers to quickly rent a film or films while doing their regular shopping, providing immediate access to movies without having to either visit a video rental store or order the films online.

Touch Automation provides the kiosk, which measures 28 by 36 by 66 (or 84) inches and consists of a built-in RFID reader, a robotic mechanism for dispensing and receiving DVDs, a touch-panel screen and point-of-sale software. The kiosk is connected to a server via the Internet so the system owner can monitor it remotely. Touch Automation can host the Internet-based server for smaller companies, such as a small grocery store with its own kiosk. In most cases, however, all RFID and POS data is routed directly to the video retailer's own server.

According to Jan Svoboda, UPM Raflatac's sales and marketing director for the Americas, the Touch Automation system uses UPM Raflatac's circular Rafsec BullsEye HF 13.56 passive RFID tags, which comply with ISO 15693. The self-adhesive tags are applied to the disc's upper side, either by the disc rental company at the distribution center, or by a media distributor before it reaches the rental company's distribution center. At the same time, the DVD's unique ID number, SKU number, the movie's name and genre, as well as any other details the rental company chooses to write, are encoded onto the tag.

"The tag is used to manage inventory," Svoboda explains, "and to ensure a customer is getting the movie requested and returning the movie originally rented."

A customer using the kiosk follows prompts on the 17-inch screen to find the desired movie. After choosing what to rent, the customer presses the "checkout" prompt on the screen and swipes a credit card using the kiosk's built-in card reader. The machine's robotics system then pulls each chosen title from the storage area and brings it within an inch of the RFID reader, which captures the tag ID number of the movie. The Touch Automation system compares the RFID data with the data related to the customer's selection. If the information matches, the DVD is provided to the customer through a slot.

When returning the DVD, the customer presses the "return" prompt, the robotic system draws the disc into the machine and the reader captures the RFID data on the DVD's tag once more. If there is a match, the disc is returned to its storage position and the point-of-sale process proceeds to charge the customer's credit card the appropriate amount for the duration of the rental. The data related to the rentals can then be stored in a hosted Web site via a broadband Internet connection.

DVD Kiosks -- Wegmans next in line

Wegmans Replacing DVD Rental With Kiosks -- April 2nd, 2007 -- ROCHESTER, N.Y. — Wegmans Food Markets will be closing all of its video rental departments and replacing them with DVD rental kiosks over the next six months. According to a report last week from NBC 10 in Rochester, Redbox, Oakbrook Ill., will be installing its dollar-a-day rental kiosks, which carry only new releases and hold 500 DVDs. DVDs can also be reserved online through www.redbox.com and picked up at a kiosk of the customer’s choice.

DVD Rental Kiosks

Article on Wirespring blogsite abouit DVD kiosks and how well they are doing. It was interesting last night on 60 minutes the interview with the fellow at NetFlix as well. Stock analysts have been shorting his stock perhaps with the belief that eventually the consumer will go fully digital with no media (ie download to their tv-set. source link from Interactive Kiosk News

Self-Service Kiosk Reviews -- Video Express Kiosk at Cub Foods

Writeup on the rental, and maybe more importantly, the return process of a DVD Video Rental kiosk used by Hollywood in Cub Food Stores. Waiting in line to rent, or to return, illustrates positives and negatives of the experience.

afterglide: Indecision in a box

Sunday, November 26, 2006
Indecision in a box

Last night I decided to try the Hollywood Video Express kiosk at Cub Foods in Eagan. These are video rental vending machines that take a credit card as payment. You can rent a DVD for a dollar a day, including new releases. This is a great bargain over renting a new release at Blockbuster, but not so great if you're bad about returning the movies in a timely manner. I don't know what Blockbuster or similar competitors are charging for new releases and late fees, but forget about returning the movies to the kiosk for a week, and you've racked up $7 or $8 per DVD.

Theoretically this is pretty convenient, but how many times have you been with your friends or significant other at Blockbuster debating at length over what movie you want to see? She wants to see Mona Lisa Smile for the third time, and you want to see Naked Cheerleader Rubdown III: The Nippening. You argue over the merits and shortcomings of a couple of dozen movies as the more decisive patrons pass you by to make their selections. Now put that extended series of arguments in front of a single rental kiosk in a 24 hour supermarket with a line of several people behind you. You know exactly what you want to rent, but you are one of the unfortunate souls behind the gum-smacking high school dropout and one of her baby daddies as they bicker incessantly.

I will be returning my DVD's this afternoon, but I've seen the process, and unfortunately you're stuck in line for the return, as you have to interact with the screen. No slot to shove the discs into like at Blockbuster or other brick and mortar rental stores. I'm sure with my luck, I yet again will be stuck behind the 300 lb toothless trailer matron in overloaded sweat pants with a baby hanging off each massive, sagging, spider-veined tit.

But for overall value, I still give the kiosk a thumbs up. I rented two new releases, Nacho Libre and X-Men: The Last Stand for $2 plus tax. X-Men I'm glad I didn't pay $8 for in the theater. I'm also watching Nacho Libre as I write this and so far my thoughts are similar. Worth seeing, but not worth paying much for. Pending verdict for both: meh.

RedBox Deploys Remote Management system

The company eventually selected Kaseya's Enterprise mangement software, "which costs about $1,000 to start, [and] uses a combination of server software hosted on servers at redbox's data center and distributed agents on each managed kiosk.

From Bill Gerba at Wirespring

RedBox deploys remote management software for their DVD kiosk network
Considering the size and scope of the business that DVD rental kiosk firm RedBox had planned since its inception, it's amazing that they managed to deploy 150 kiosks before ever realizing that they'd need a remote management platform, but according to this press release, that's exactly what happened.

Now in their defense, there was a lot of uncertainty surrounding their business model at first (renting DVDs at McDonald's and other fast food places for $1/night), so their initial efforts were probably more aligned towards proving the model than working on remote management tools, but given the plethora of software options out there, it still seems amazing that they could have placed so many units before it became apparent that remote control would be useful.

The company eventually selected Kaseya's Enterprise mangement software, "which costs about $1,000 to start, [and] uses a combination of server software hosted on servers at redbox's data center and distributed agents on each managed kiosk. Kaseya provides software updates and support for its software to redbox, which the customer received by connecting to Kaseya's data center. There is also a server-based application that allows redbox IT staff to perform Web-based management and administration tasks on all the kiosks."

DVD Burning Kiosk

Kiosk maker Polar Frog introduces a mainstream movie download kiosk at health grocer.

JULY 11 | LAS VEGAS--In one of the first deals for in-store DVD burning, kiosk maker Polar Frog Digital will bow a mainstream movie download kiosk at healthy grocer Sprouts, Polar Frog CEO Todd Rosenbaum said.

Polar Frog has deals with independent suppliers Hart Sharp, Razor Digital and Ariztical to offer a selection of content for in-store burning through the kiosks, which the company is showing off during the VSDA convention. The company is in talks with the major studios and other retailers to add additional content and store locations.

Polar Frog’s kiosks hold between 700 to 800 films or 3,000 TV episodes (roughly 3 terabytes). Through a high-speed Internet connection, the kiosks can download 40 new movies each month.

Consumers can only choose from those movies already downloaded to the kiosk. Once they make their choice, the kiosk takes six to eight minutes to burn a disc, which can then be played on any set-top DVD player. The kiosks also let consumers pre-order titles through the system.

Polar Frog is an offshoot of rackjobber TopHits Music, which handles CD, DVD and book sales at Walgreens and other grocers and convenience stores.

The company’s kiosks have already been operating in adult stores since the start of the year, and now Polar Frog has its sights set on the mainstream movie business.

So far they’ve struggled with a chicken and egg situation.

“It takes content to get a retailer, it takes a retailer to get content,” Rosenbaum said.

The company is selling its kiosks to retailers for roughly $10,000. The revenue for each movie or TV show sold will be divided with 33% going to content owners, 30% going to the retailer and the rest back to Polar Frog for operational costs (17%) and profit.

Rosenbaum said in-store burning could open new opportunities for independent suppliers that can’t hold the shelf space of the majors and for retailers, such as drugstores, that haven’t been able to be profitable in selling new release movies because of the thin margins.

“Our sex appeal is what we’ll do with independent content,” Rosenbaum said.

website

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.

DVD Burn on Demand Kiosk

Nero, leaders in digital media technology, announced today that Polar Frog Digital, a leader in retail DVD manufacturing, has chosen the Nero 7 Software Development Kit (NeroSDK) as the video burning solution for its MediaIgloo line of freestanding on demand DVD kiosks.

The Polar Frog Digital MediaIgloo will be demonstrated at the Nero meeting room at NAB 2006 (South Hall, lower level, #SL193-MR), April 24 - 27 at the Las Vegas Convention Center.

MediaIgloo is a versatile, scalable solution that allows retailers and consumers to take advantage of digital product access away from the home, while giving retailers the ability to expand their core business in a practical and affordable manner. MediaIgloo's customer experience is quick and convenient, allowing them to choose content from sources such as movies, sports events and children's television, burn a custom DVD in five-to-seven minutes, and pay for it with cash, credit or loyalty cards.

"Polar Frog is at the forefront of its industry and we are excited to be working with them to provide core technology for this new exciting digital media platform," said Udo Eberlein, President, Nero, Inc. "Our NeroSDK is ideal for a wide variety of digital audio and video applications. We continue to be very aggressive in our efforts to find the right companies with which to align ourselves."

"As creators of an innovative product that allows for the custom manufacture of DVDs at retail, it was important for us to find a digital media solution with high performance, reliability and flexibility," said Todd Rosenbaum, CEO, Polar Frog Digital. "The NeroSDK, is a perfect fit for this new platform in a quickly emerging market."

About Nero

Nero (www.nero.com) develops and distributes the world's leading digital media solutions for consumers and professionals. Today more than 200 million users worldwide rely on Nero's award-winning and trusted, industry approved applications to manage the needs of the connected digital home and forward-thinking corporations.

Nero's rapidly-growing portfolio of products defines new levels of innovation in the company's three key areas of focus: Digital Media Solutions - delivering multimedia applications for audio, video, photo and TV capturing, editing, burning, managing and sharing; Audio and Video Compression Technologies - providing world-class interoperable standards-based solutions for encoding and decoding digital content with support for Next Generation HD and popular handheld formats; and VoIP Solutions - providing cost-effective voice, text and video communication over the Internet for home and business.

Nero products are globally distributed by leading hardware manufacturers, international distribution partners and online portals, and can be purchased directly at www.nero.com. Nero provides worldwide coverage through Nero AG, based in Karlsbad, Germany and two subsidiaries: Nero Inc. in Glendale, California, USA and Nero K.K. in Yokohama, Japan.

Nero(R), Nero Digital(TM) and SIPPS(TM) are trademarks of Nero AG and its subsidiaries. Any other product names are trademarks or registered trademarks of their respective owners.

(C) 2006 Nero. All rights reserved.

About Polar Frog Digital

Polar Frog Digital (www.polarfrogdigital.com) a designer of versatile, scalable solutions that allows retailers and consumers to take advantage of the digital movement away from the home. These self service kiosks give retailers the ability to expand their core business in the most practical and affordable way through the use of digital delivery on demand from local storage.

Once deployed Polar Frog kiosks immediately make a positive impact on store sales and customer satisfaction. Polar Frog kiosks will provide real-time marketing by tracking consumer browsing and purchasing habits. The company's systems offer great value for retailers committed to remaining competitive in the digital age while increasing their bottom line.

Polar Frog Digital incorporates a revolutionary new technology that permits the sale of custom DVDs on a real time basis from a local source incorporating the financial controls that the industry has been searching for.

Polar Frog Digital is staffed with savvy smart professionals looking to bring the cutting edge to the forefront. The company is poised to be the largest reseller of digital entertainment media content including Television Series, Hollywood movies, Children's Cartoons and movies, games, and books.

Whether it is manufacturing on demand or the newest technologies such as iPod, PSP and Cellular devices, Polar Frog kiosk solutions have been designed to service all these products and our dynamic platform will adapt to any future technology advancements.

New player in DVD burning kiosk business

Sonic Solutions announces AuthorScript software at CES. This is already being used on kiosks (Polar Frog).

Sonic offers burning solutions
Amid growing interest in on-demand DVDs
By Paul Sweeting 1/12/2006

JAN. 12 | As the studios and other program suppliers search for incremental sales in the face of flattening DVD growth, giving consumers and retailers the ability to download and burn their own movie discs is getting serious attention.

The latest sign of growing interest in the idea comes from Novato, Calif.-based Sonic Solutions, a leading provider of DVD-burning software and professional authoring tools. Earlier this month, the company announced the release of its AuthorScript DVD on Demand software development kit. The new software package is designed to allow program suppliers to implement so-called managed-burning services in industrial, retail kiosk, PC and set-top box environments.

No major studio has yet licensed the Sonic software, but set-top box makers have been signing on in anticipation of providing cable operators and other service providers with a managed burning option.

Click Here!
At the recent Consumer Electronics Show, Sonic announced a deal with Scientific-Atlanta to incorporate DVD on Demand technology into new S-A boxes to allow consumers to burn DVDs of programs recorded on the box�s internal digital video recorder drive. It also reached a deal with chipmaker Broadcom to include DVD on Demand in set-top boxes powered by Broadcom technology.

�Electronic DVD sell-through requires meticulous integration of Hollywood content creation, electronic distribution and DVD burning technology, and there is no other company that can bring to bear the combination of across-the-board expertise and trusted industry relations needed to make this work,� Sonic senior VP Jim Taylor said. �With AuthorScript DVD on Demand, we are applying our experience and innovation to expand DVD�s versatility and create a profitable new channel for the industry.�

Taylor acknowledged that widespread adoption of the technology by the major studios is contingent on all parties agreeing on a digital rights management system, but said those discussions were underway.

Late last year, Sonic and Microsoft proposed a system for encrypting downloaded files using the same Content Scrambling System used on commercial DVDs before the file is burned to a disc.

The latest round of negotiations over how to implement that system were held in Los Angeles in the week following CES.

Others are not waiting for an agreement on DRM.

At the Adult Entertainment Expo running concurrent with CES, Polar Frog Digital unveiled its MediaToad retail burning kiosk, which is based in part on Sonic technology.

The kiosk allows customers to create and burn their own adult DVDs from clips either stored on site or downloaded from a server.

Also at CES, Image Entertainment subsidiary Egami Media announced a deal with Lighting Content Distribution to make Egami programming available for burning at retail kiosks, using Lightning�s proprietary technology.

�The instant gratification provided by on-demand solutions levels the retail playing field and will make retail floor space limitations a non-issue,� Image CEO Martin Greenwald said. �While the smaller independents and chain stores will benefit from the virtual inventory a kiosk provides, even larger retailers are looking for ways to deal with the thousands of DVD titles available today.�

Video Business Online - 1/12/2006 - Sonic offers burning solutions - CA6299091

Case Study - DVD Burning Kiosks for Amusement Parks

Next time you ride a roller coaster, maybe you will have a kiosk there to make a DVD that you can take it home and remember/replay the ride.

DVD Kiosk for Amusement Park Case Study link

DVD Format War

Fox comes out on Blu-Ray side with Sony. They are the last of the major studios to cast their vote.

Fox, a unit of News Corp., joins Sony Pictures Entertainment and The Walt Disney Co. backing Blu-ray.

Supporting HD DVD are Warner Bros., Paramount Pictures and Universal Pictures. Tech supporters are Toshiba and Microsoft.

More on e-Week

Tesco UK Movie Download Move

Tesco is planning to launch a film downloading service to complement its music download service in the UK according to an interview with the high street retailer and the BBC.

Although there are no confirmed plans at the moment, the food retailer is looking into the possibility once broadband speeds and capacity rise further.

Tesco currently holds a small but significant 10 per cent share in the UK music download industry and feels that the movies are the next step.

The Beeb quotes a spokeswomen from Tesco saying that it entered the download business with a view to expanding beyond offering music.

Video games and films have always been part of their plan as the digital market expanded, she added.

Tesco isn�t the first company to suggest a move to offer downloading films. Both Wippit and Napster (here) announced earlier in the year that they are planning to to offer film downloads. Wippit going as far as suggesting a charge of around 99p per movie.

link

DVD Movie Rental Prospects

Self-service movie rental: will DVD kiosks take off?

by Michael L. Jones, contributing writer � 15 March 2005

Greg Hyde thinks renting a DVD should be as effortless as buying chips from a vending machine.

He envisions one day installing a string of Box Office Express DVD-renting kiosks in convenience stores and colleges across Louisville, Ky. But before Hyde can realize his DVD rental empire, he must get the public to use the two machines he has today.

"Right now, I�m losing money trying to get people to catch on," he said. "I guess it�s like the first time you swiped your ATM card in a money machine: You were a little wary."

The 7-foot tall Box Office Express holds up to 720 DVDs or videogame discs. Using a credit or bankcard, customers can rent a disc for three days for $2.99 and $1 for each additional day.

Last summer, Hyde placed his kiosks in a busy C-store and a high-end athletic club in the suburbs. The arrangement called for the host business to get 10 percent of the profits from the DVD rentals.

So far, so good. But Paula Bader, owner of the C-store, had her machine removed in early January.

start quoteWhat you have with our machine is a video store without the overhead.end quote

-- Bob Tollini, sales director
Video Access Computers

"I pulled the thing out of my store after four months because I wasn�t making any money," she explained. "There are better things I can do with the space it was taking up."

Hyde purchased his kiosks through American Entertainment Distributors, a Florida company that specializes in franchise businesses. The two machines cost Hyde a little more than $32,000 each. He figures he�s invested $80,000 so far, but is willing to spend more because he believes in the concept.

"I�m going to give it another six months to a year," he said.

In retrospect, Hyde realizes Bader�s store was a bad location for the Box Office Express. The food mart is located near a cluster of bars and a commuter school, in a downtown known to roll up the streets at night.

"Bader�s has heavy traffic, but it doesn�t get a lot of repeat traffic," Hyde explained. "The machine needs to be somewhere where a person knows they�ll be back in three days."

Bob Tollini, sales director for Video Access Computers, said trial-and-error lessons like Hyde�s are being learned across the country everyday. VAC, a subsidiary of Wisconsin-based V & L Tools, manufacturers the DVD rental kiosks that Hyde owns.

"This industry is only a year or two old," Tollini said. "People are still sorting everything out. It�s like the ATM. When the first ATMs came out, people used to just stare at them. Then they saw more of them. Once ATMs were everywhere, people started using them. It�s the same with the kiosks. People need to see them."

Tollini said his company sold 100 kiosks last year and are on track to surpass that number this year. Other customers have had success with the kiosks on college campuses, military bases and in super markets near residential areas.

read more

Disposable DVDs

Convenience Stores Add DVDs to Play List

June 15, 2004

SAN ANTONIO -- Patrons of Diamond Shamrock stores in the San Antonio-area can now get their favorite DVD along with a cup of coffee. A few weeks ago, the convenience stores began carrying ez-Ds, a 48-hour no-return digital video disc, according to the San Antonio Express-News.

The DVD, from Disney�s Buena Vista Home Entertainment, erases itself after two days of being opened. Disney began testing the DVDs last September in four cities, and in May, the company announced expansion into San Antonio, Orlando, Fla., Denver and Phoenix.

Some environmentalists have protested the disposable DVDs, objecting to the throwaway nature of the product and the lack of convenient recycling options, the San Antonio Express-News reports. Disney does recycle ez-Ds that consumers mail to GreenDisk Services, based in Columbia, Mo.

But overall consumers have reacted positively to the ez-Ds, said Alan Blaustein, CEO of New York-based ez-D maker Flexplay Technology. While the movies haven�t sold well in grocery stores, the disposable films have found a niche in convenience stores and pizza delivery chains, such as Papa Johns.

The major selling point for ez-Ds is convenience and no late fees, retailers say. More than 50 titles are available for as little as $5.99.

http://www.nacsonline.com/NACS/News/nd0615043.htm