Atlanta Area Selected for Major Expansion of DVD Rental Kiosk
Nov. 29, 2006 (Prime Newswire)
The greater Atlanta area has been targeted for one of the biggest single
geographic expansions of DVD rental kiosks. The installation of 170 new
kiosks in Kroger stores throughout the region has just been completed.
"The growth and vitality of Atlanta and surrounding areas make it a ideal
choice for one of our largest geographic market installations," stated Jeff
Karbowiak, Chief Operating Officer of TNR Entertainment.
TNR is currently underway on a substantial expansion nationally, adding more
than 1,300 kiosks across 25 markets nationwide by early next year and
more than doubling its current network.
A Virtual Happy Meal: McDonald's Redbox a Smashing Success
Dec.1, 2006 (Seeking Alpha)
The concept of Redbox started out 4 years ago, but what was initially a
series of experiments by McDonald’s (MCD) has turned into a success for
the company. McDonald’s first come up with the concept in 2002, but not
until 2003 did they test their first unit. Their beta launch consisted of only 6
DVD kiosks in their Las Vegas restaurants and another 11 in their
Washington area restaurants.
McDonald’s stayed with their Redbox venture and by the summer of 2004,
the company started a 2 year test launch by expanding their DVD experiment
to 100 machines in the Denver area. Realizing the potential for expansion
beyond just McDonald locations in late 2005, McDonald's sold 47.3% of the
company to Coinstar (CSTR) in exchange for $20 million in cash and another
$20 million in 2006 if everything went according to plan.
Currently there are 800 Redbox kiosks in McDonald’s. In a press release
issued on Thursday, McDonald’s announced that they now plan on expanding
their relationship with Redbox and plan an aggressive rollout in the first half
of 2007. With McDonald's set to add at least another 800 kiosks in the first
half of 2007, the future for DVD kiosks may be looking very bright indeed.
What may have started as a hairbrained idea to diversify McDonald’s revenue
beyond fast food has turned into a full blown DVD revolution. McDonald's
rented over 15 million DVDs in the last 12 months at just their own 800
DVD locations, the economics of this expansion appear very compelling. At
an average of 1.25 million rentals a month this means that Redbox gets
somewhere between 50 - 55 DVD rentals per day at their McDonald’s
locations. Considering that an average rental period is 1.5 days, the rental
traffic at a McDonald’s Redbox location should pay for the kiosk in just 9 - 10
months, not including content costs. After 10 months, the machine turns
into a profit center that fuels growth all while still contributing to intangible
benefits like being able to offer McDonald’s customers something other
restaurants can’t, as well as serving as a mechanism to encourage repeat
News and Press Releases
Dinner and a Movie: Will it be the death of Netflix?
Nov. 20, 2006 (digitaljournal)
The DVD rental kiosk is a relatively "new corner to the DVD rental scene". "It
has a fairly good chance of not only staying for good but even succeed in
bumping out the older more traditional sources for DVD rentals like
Blockbuster Video and the more recent hit success Netflix."
DVD Kiosk Industry: Coinstar/Redbox Seeing Strong Growth
Nov. 3, 2006 (Seeking Alpha)
"On a day where Blockbuster (BBI) Video had to admit that they were
forced to close 343 net stores over the last quarter, Coinstar (CSTR)
reported their earnings and gave the investment community a very different
outlook on the current state of the DVD kiosk industry."
In' short the DVD kiosk industry is strong. Redbox has done exceptionally
well this year and over the long term, Coinstar expressed confidence that
Redbox can get to over 10,000 locations in the next 3 - 5 years."
"With over 900 DVD kiosks having been rolled out over the last 9
months, Redbox now has approximately 1,600 kiosks nationwide. Of these
1,600 machines, approximately 1,000 are located in McDonald’s restaurants
and the other 600 are currently, either being tested or in the process of
being rolled out by 30 other merchants."
"Of these merchants two particularly important relationships were forged over
the last quarter. The first was with Walgreens (WAG) who is currently
testing 38 Redbox machines in Houston and Chicago. The second and more
significant partner is Walmart (WMT) which has been testing Redbox
vending machines in their Atlanta based stores."
DVD Rental Kiosk Offers Free Rentals to New Customers
Nov. 3, 2006 (Kiosk Marketplace)
"The New Release, which operates DVD-rental kiosks in 1,300 retail
locations, announced a new promotion at 291 of its locations. Kiosks in
selected supermarkets in Texas, Florida, Colorado, New Jersey, Pennsylvania,
Maryland and Delaware will now offer one free rental to new customers,
encouraging them to try the machine."
"We want as many shoppers as possible to benefit from the convenience and
lower cost of DVD-kiosk rentals, particularly as we embark on a major
national expansion," said Tony Sciolla , chief marketing officer for TNR
Entertainment Corp., parent company of The New Release.
"The kiosks involved in the special promotion are located in selected
Kroger/KingSooper, H-E-B, Publix, City Market, Super Fresh and A&P
supermarkets in different areas of the seven states."
Redbox Signs Five More Supermarkets for its Automated DVD
Nov. 27, 2006 (Cygnus Business Media)
"Automated DVD vending kiosk provider Redbox has agreed to install its
units in stores operated by Albertsons LLC, Chevy Chase, Hannaford
Supermarkets, Martin's, and Strack N Van Til, according to Progressive
Grocer, a supermarket trade magazine."
"Editor's Insight: The Redbox machine has been a big hit with retailers. These
DVD rental machines and other self serve kiosks will make the general public
more familiar with cashless vending, which will create new growth
opportunities for the full line vending industry."
"The recent National Automatic Merchandising Association National Expo in
Orlando, Fla. included a keynote presentation on a consumer survey about
perceptions of vending. An important finding is that a larger percentage of
consumers will use credit cards to pay for vending purchases if given the
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DVD Rental Kiosk Player TNR Corp. Selects IBM To Support
Dec.20, 2006 (VendingMarketWatch.com)
"TNR, which operates automated DVD rental kiosks under the brand "The
New Release(TM)," has served more than a million customers with over five
million DVD rentals since its inception in 2002. A year ago, TNR operated
200 kiosks. It now expects to manage over 2,000 kiosks in U.S. stores by
early 2007, and eventually install more than 20,000 kiosks. "
DVD Rental Kiosks Take Aim at Traditional Video Stores
Dec.11, 2006 (Finance Visor)
"Industry analysts confirm that video rental stores are fading out of the
picture due to the increasing pressure from subscription services such as
Netflix (NFLX) and the growing popularity of DVD rental kiosks."
One company that has a slightly different approach is DVDNow Kiosks Inc.
(www.dvdnowkiosks.com), a DVD kiosk company that is growing their
network of locations through partnerships with local owner operators.
Entrepreneurs can purchase a DVDNow rental kiosk, place it in a local
business, and generate revenue through the rental and sale of DVD’s.
DVDNow’s partnership with local owner operators is a real strength as it
allows for machine management on a local level with movie inventory chosen
based on actual renting patterns, tracked by proprietary software, rather
than ordering the same titles for thousands of locations. Although available
nationally, DVDNow is preparing to deploy on a large scale into Texas,
Florida, and California, and plans to be in 1,000 locations by the end of