Comments on: DVD Kiosk Industry Heats Up In Hot’Lanta

By: Davis Freeberg’s Digital Connection - TNR Entertainment Hires IBM To Support Aggressive Growth Plans

Wed, 13 Dec 2006 06:17:01 +0000

[...] With DVD kiosks leaving their infancy years and beginning to approach their toddler years, TNR Entertainment has found that managing this growth has become increasingly difficult. In an attempt to help position the company for more scalable growth in the future, TNR Entertainment has announced that they have hired IBM to support the company over the next several years. [...]

By: soheil

soheil — Thu, 07 Dec 2006 22:05:55 +0000

Davis,

With regards to the rev. fee shared by the host (such as the supermarkets); the number initially was closer to the 10% range.

However, with red hot competition to grab the real estate of the big boys (Kroger, Safeway, etc.), it is not uncommon now for the host to command higher fees, not to mention up front “bonus” payments!

As for the number of rentals per day coming from such sites; I believe that it needs to be closer to the 50 range target for the operators.

By: davis freeberg

davis freeberg — Thu, 30 Nov 2006 14:17:17 +0000

With Starbucks brand, I think that they could add kiosks to every restaurant, run a monthly rental program and an online rental program and crush everyone. Not only would they dominate the DVD industry, but they’d sell more coffee too. They’ve been getting more interested in movies, but it seems like they’d rather be more like Red Envelope then Netflix. Right now they sell DVDs, but a pretty limited selection and no kiosks. I think that they will end up being a real wildcard in the DVD rental industry.

By: Dave Zatz

Dave Zatz — Thu, 30 Nov 2006 14:08:30 +0000

Starbucks… hmmm. I visit Starbucks several times a week, unlike the grocery store which I only visit several times a year. If Starbucks had a movie rental kiosk, I’d probably put it to use!

By: davis

davis — Wed, 29 Nov 2006 15:18:00 +0000

That’s a good question. I’m not 100% sure, but my impression was that these deals typically involve some sort of percentage payout to the retailers. It could be something like 5%, but I’m not sure why that number sticks in my head.

The real advantage for Krogers is the ability to rent DVDs. People love DVDs, but grocery stores have a huge problem with stocking them because of the inventory issues and the floor space that traditional DVD stores take up. These kiosks are small, effiecient and they can put them by the doors so that someone might make an impulse buy after they’re done shopping, plus then the retailer gets the customer coming back to the store in a day or two. Even if the retailer only breaks even, it’s still worth them giving up 7 square feet of floor space in order to be able to fill the demand at their store instead of someplace else.

My best guess is that a DVD kiosk needs to be in a location where they can rent about 15 DVDs per day, if the kiosk company and the retailer want to profit from the investment. This is harder then it sounds for the neighborhood liquor store, but not impossible for places like Kroger and Walmart.

By: Michael Webster

Michael Webster — Wed, 29 Nov 2006 14:03:15 +0000

Davis;

Are the deals basically the same, with the retailer getting a flat fee for renting out the space for the dvd kiosk?

Or is there a sales percentage term which requires monitoring by the retailer?