TNR slows growth under new management
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By Ned Randolph -- Video Business, 10/12/2007
OCT. 12 | TNR Entertainment has in the last three weeks quietly undergone a senior management change amidst a redirection that will see the DVD rental kiosk operator slow growth and focus on improving execution in its current locations.
CEO Richard Cohen, a veteran of MGM and Walt Disney Co., and chief operations officer Jeff Karbowiak left the venture capital-backed company last month. Tim Belton replaced Cohen, as CEO and president, and Bob Williams, formerly with film processing kiosk operator Qualex Corp., assumed the role of chief operations officer.
The move by TNR, which operates about 2,000 kiosks under The New Release and Movie Cube brands, signals a change in corporate strategy from one of rapid growth to strengthening performance at existing locations, Belton said.
“We’ve got a couple of thousand kiosks in the marketplace; some are performing better than others,” Belton said. “Our objective is to get them all performing at full capacity. That’s a commitment that our [retail] channel partners and TNR share.”
“The key focus is to make sure—now that we’ve proven we can win at the land grab—to win at the operational excellence front,” he said, adding that growth would nonetheless continue through next year.
TNR kiosks are in retailers including Kroger, Dillon’s, Food 4 Less, Food Lion, Fry’s, King Soopers, Quality Food Centers and Ralph’s, among others.
Hired to the newly created position of chief technology officer was Tracy Terrell, who will be joined by a yet unnamed executive to oversee accounts, said Belton.
As recently as June, company press releases touted TNR’s aggressive growth plans, which it said: “call for continuing national expansion of its retail locations, with its kiosk network expected to grow to nearly 3,000 by this year end.”
TNR’s largest DVD kiosk competitor, Redbox, has more than 4,000 locations. DVDPlay has more than 1,000 machines in the U.S. and Canada.
Former chief operating officer of publicly traded construction firm TRC, with prior experience in corporate restructuring and leading venture-backed firms, Belton said he was a “known quantity” to the original investor groups of TNR.
In addition to Belton and Williams, Terrell began his career at Anderson Consulting and helped large companies implement “SAP” enterprise systems.
“The backbone that operates this business, no surprise, is technology. That’s why this position is so important,” Belton said. “Today we’re renting DVDs out of the kiosks. In the future, we may be downloading them out of the kiosks.”
TNR Entertainment is backed by a number of investor groups, including Celerity Partners LP of Los Angeles; Chapton Partners LP, a Houston family partnership; Laminar Direct Capital L.P., a member of the D. E. Shaw group of companies; and MCG Capital, a leading specialized financial services company and financial advisor. Brookwood Associates serves as financial advisor to TNR.
