DVD kiosk business expands
Machines to offer film downloads to portable devices, in-store disc burning
By Susanne Ault and Jennifer Netherby -- Video Business, 10/27/2006
OCT. 27 | More companies are jumping into the DVD kiosk space with an eye toward in-store disc burning and downloads to portable entertainment devices.
E-Play is testing DVD sell-through machines in fast food restaurants Wendy’s and White Castle and mass merchant Meijer’s, with plans to eventually use kiosks to sell film downloads to personal media devices and downloads to be burned onto DVD.
Through November, 50 e-Play machines will be placed at these retailers in the Columbus, Ohio, area. Machines also will be slotted at the Columbus airport and Ohio State University by the end of 2006.
Each e-Play machine offers 800 titles within 9 square feet of space. New releases are priced less than $20 each.
Retailers can either share in the e-Play sales revenue or lease space to the kiosk company.
“Right now, pharmacies might only offer 30 titles—there is a huge shrink problem” for DVDs, e-Play CEO Alan Rudy said. “But we can take that same space and put in 800 titles and eliminate shrink at the same time.”
Additionally, e-Play machines are equipped with technology to sell film downloads to personal media devices. Systems also are in place that can allow for downloaded films to be burned onto DVD.
However, no major studio has licensed its content yet for e-Play downloading or burning. Rudy expects to be able to offer film downloads onto personal devices by January.
Meanwhile, former Warner Home Video president Warren Lieberfarb joined the board of kiosk-maker MOD Systems as a vice chairman, the company announced last week.
Seattle-based MOD makes music kiosks now used in a Starbucks pilot store in Santa Monica, Calif., and is developing DVD kiosks that would store up to 1,000 movies that retail customers could burn to disc within minutes. The company also has developed technology that would allow users to transfer downloads from kiosks to their mobile phones or portable devices via a USB port or wirelessly. MOD doesn’t yet have any deals with studios or retailers for its DVD kiosks, which it believes are six to nine months away from rollout, because of licensing issues.
MOD kiosks would cost retailers between $5,000 and $30,000, depending on how many movies they plan to carry and how much support and upkeep they would require from MOD. MOD CEO Mark Phillips sees its kiosks as a way for retailers to stock smaller films and back catalog as well as new releases, using the kiosk as a backup if they run out of a title. The company also believes it could allow more non-traditional retailers to offer DVD because they wouldn’t have shelf-space constraints.
E-Play hopes to upgrade its machines with rental capabilities as well next year.
Another future enhancement is Internet connectivity, with which e-Play customers will be able to choose among 50,000 e-Play titles for mail delivery.
The company is pleased with early testing results.
At Meijer’s, e-Play machines are located within DVD sections, but customers are buying titles from both e-Play and Meijer’s shelves.
“It has been interesting, where the best selling [e-Play] title there is Edward Scissorhands, which is something that isn’t being offered at Meijer’s,” Rudy said. “Our hope is that [e-Play retail partners] eventually shrink down their existing DVD department and just carry the latest releases. They can use the extra shelf space to sell other products.”
