DVD-trading kiosks expand in GameStop, Dollar Tree
NCR acquisition of E-Play to put machines in more locations
By Danny King -- Video Business, 7/17/2008
JULY 17 | NCR, the world’s largest automated-teller machine maker, has purchased a minority stake in a closely held kiosk maker in an agreement that will add several thousand self-service DVD-trading machines in GameStop, Dollar Tree and other U.S. retailers within the next few years.
E-Play's kiosks allow consumers to buy and sell DVDs as well as rent.
NCR paid an undisclosed amount for its stake in closely held E-Play, which will license its technology to NCR to mass-produce the machines. The companies will start a pilot program for the new kiosks in Georgia, North Carolina and Ohio, with another national retailer whose identity wasn’t disclosed.
The agreement marks an additional foray into the booming DVD kiosk market for NCR, which is partnering with No. 1 U.S. movie-rental chain Blockbuster to develop machines that will allow in-store digital downloads.
Attracted by movie-kiosk prices that are lower than movie rentals at stores such as Blockbuster, U.S. consumers will spend $800 million at kiosks by 2010, triple the amount spent last year, according to Convergence Consulting Group. Meanwhile, store rental revenue, estimated at $5.4 billion last year, will fall to $3.1 billion by 2010, according to Convergence.
“Part of the reason we partnered with NCR is to speed up the manufacturing process,” said Alan Rudy, who co-founded Columbus, Ohio-based E-Play in 2004 and is CEO of the company. “We have less than 100 machines.”
The machines, which are currently in “less than 20” GameStop stores as well as Exxon and Dollar Tree outlets, can read DVDs inserted by customers and dispense a credit voucher that can be used at the retailer where the kiosk is located. The kiosks, which can hold as many as 4,200 DVDs and can dispense them for rental or for sale, reimburse customers from 50¢ to $13 for a DVD, depending on the title and condition, and charge $2 to $25 for a DVD, Rudy said.
U.S. DVD kiosk leader Redbox, which has delayed an initial public offering it announced in May and whose machines don’t allow for trade-ins, more than doubled its machines to 7,900 as of March 31 from about 3,000 a year earlier and announced agreements earlier this year with Walgreens and Wal-Mart that will bring its kiosk total to more than 11,000 by the end of next year. Its next-largest competitor, closely held The New Release, had about 2,100 North American kiosks as of February and plans to add another 1,000 machines by the end of the year.
NCR, which was founded more than a century ago and whose products range from ATMs to self-service hotel checkout machines, in May said first-quarter net income jumped 41% to $48 million as sales rose 19% to $1.18 billion.
LINKS
NCR: http://www.ncr.com/
E-Play site: http://e-playllc.com/
Redbox: https://www.videobusinesss.com/article/CA6574886.html?q=redbox