Cheaper movies feed kiosk boom
FEB. 21 | UPDATE: Technogeeks may argue over whether Unbox or Vudu provides the best film-downloading service, while others may debate Blockbuster versus Netflix, but the common man just wants a $1 movie for the night, says Tim Belton, CEO of movie-kiosk operator The New Release.
The three largest kiosk operators are on tract to have a combined 15,350 machines in the U.S. by the end of the year, up 57% from the end of 2007.
“There are a lot more traditional DVD players out there than households with set-top boxes and high-speed connections,” said Belton, whose closely held company owns Moviecube, the No. 2 U.S. kiosk operator. “As long as we keep the price point below the cost of a rental at a store and we don’t have membership fees, we’re going to continue to absorb market share in the $8.5 billion rental business.
The New Release will add about 1,000 of its Moviecube kiosks in North America by the end of the year after receiving about $11 million in funding.
Loblaw, Canada’s largest supermarket chain, will add Moviecube kiosks in 350 of its stores by July, closely held TNR said in a statement. TNR, which trails only Redbox among movie-rental kiosk owners, will add another 650 U.S. kiosks by the end of the year.
TNR, which has about 2,100 U.S. kiosks, said it received $11 million from Washington-based MCG Capital Corp. The company didn’t disclose whether MCG was providing debt or buying equity.
“Expanding into Canada, where movie rental customers have shown a veracious appetite for DVD rentals, is a much anticipated move for us,” said Tim Belton, chief executive officer of Houston-based TNR, in a statement.
Earlier this month, Redbox, which tripled its kiosks to about 6,300 last year, said it will add machines in about 2,700 Wal-Mart stores by the end of next year. Wal-Mart started adding Redbox machines in 2006 and now has kiosks in 800 stores.
Redbox is 95% owned by McDonald’s and Coinstar.
Last month, third-place DVDPlay said it would more than double its machines to about 3,200 this year.
Meanwhile, Blockbuster, the largest U.S. video-store chain, closed about 700 of its 8,500 stores worldwide for the year ended Sept. 30 as it invested in its Total Access online-rental service to compete against rental-by-mail leader Netflix. Movie Gallery, which filed for bankruptcy in October, closed about a fifth of its 4,500 eponymous and Hollywood Video stores last year.
Kiosk operators can charge less for movies because of lower costs from their revenue-sharing agreements with retail partners, said Belton, who wouldn’t specify how sales are split between TNR and supermarket partners such as Kroger and H-E-B.
“That’s very different from investing a couple hundred thousand dollars in a new store and always having three or four people there,” said Belton.
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| Submitted by: | Derrick (videomax@kanokla.net) 2/29/2008 12:21:42 PM PT |
| Location: | kansas |
| Occupation: | store owner |
I see that the ones that are making comments done have a interest in a video store, or the people that work there and own them, seems like the only ones that have real comments and would even understand why Red Box is bad for any commuity, i wish you well in the near future when you cant get what you want! Maybe we should just put a computer in the class room, and they could save thousands for teaching our children, The teachers that done understand shouldnt be teaching any way
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