Personally, I hate returning DVDs and feeling like I have to watch them right away, instead of on my own schedule. If rent 10 movies a month, I’d probably save by using Redbox, but I’d rather pay twice as much and be able to pick up or return a DVD on my own schedule. This option especially makes sense for people who are near a location. If I could walk across the street and rent a different DVD every night, this would be a much more attractive options.

Whether Redbox or DVDXpress is better for consumers depends on your preferences, but in order for kiosks to take off, there has to be a business model that supports them and I think that this it. The consumer doesn’t have to deal with late fees or transaction costs and the DVDXpress gets a reliable income stream coming in each month, regardless of how many DVDs a consumer rents. Because they have such a low variable cost associated with the model, I think that this could benefit everyone involved. I haven’t seen any developments since I first saw this a year ago, but still think that the business model is nothing short of revolutionary.

Eric

As far as the additional costs go. The retailers are responsible for stocking the equipment, so that fee doesn’t exist. There is content costs, but in fairness, I didn’t include any sell through in my basic analysis of the profitablity and I believe that given the high margins on sell through, that it would certainly help to offset content acquistion costs. Finally, the retailers do charge for floor space, but this is typically done on a revenue sharing basis, so it doesn’t have the fixed costs that Blockbuster pays for rent. This isn’t to suggest that my math is spot on, but rather that with just 100 people, this thing becomes a cash cow, with 200 people the margins are insane with 300 people you start talking about real money. Retailers want this, Starbucks is exploring their own kiosks, Kroger is definetely expanding, Safeway has ordered more, Albertson is deploying more & Target and Best Buy are lobbying for burn on demand kiosks. If retailers didn’t see the benefit, they wouldn’t be pushing this hard to get these kiosks in their stores. Add to this a subscription based model and I think that the kiosk can rent movies at a price that neither Netflix nor Blockbuster can even come close to. Price won’t be everything, but it certainly will count for something.

I don’t know… I’ve seen a few and they all have cobwebs – at least those that weren’t already removed.

“On the other hand, if DVDExpress gets just 75 – 100 subscribers to adopt the monthly $12.99 pricing, then a kiosk could easily pay itself off after 2.5 years without having to place the machine in a heavy traffic area. Once the machine is paid off, the DVD kiosk essentially becomes a cash cow.”

Movies and manpower have a cost, in addition to any space rental considerations. I’m not saying it can’t be profitable, but I don’t think most consumers in most of America are ready for self-serve machines. I don’t know why that is, but it sure seems to be that way.