The venture will combine the Redbox DVD rental kiosk business with an Internet video offering from Verizon, including mobile offerings, in the second half of the year.

On Monday, Redbox-operator Coinstar Inc moved to cement its hold on its business of renting DVDs from automated kiosks, announcing it will buy rival NCR Corp’s machines and video inventory for up to $100 million. That, and better-than-expected quarterly results, pushed the stock 13 percent higher after hours.

However, investors in Verizon and Coinstar were unimpressed as the pair offered little detail about the service. Netflix shares ended up 2.2 percent, reversing a decline that came directly after the news.

The new service’s price will start from around $6 a month for movie streaming and one DVD rental at a time from the Redbox kiosks, according to a person familiar with the plan.

Netflix’s pricing currently starts at $7.99 for either streaming only or a single DVD by mail. To get both the streaming and DVD rental package prices start at $15.98.

Verizon and Redbox declined to comment on the pricing.

The alliance will mark Verizon’s first foray into video streaming outside its network operating region as the telephone company so far only offers Web video services to subscribers using its FiOS TV service which competes with cable providers like Comcast Corp and Time Warner Cable.

However, Verizon/Redbox’s success in competing with Netflix and other online rivals like Amazon.com and Hulu Plus, will depend hugely on the price of the service and the depth of content it has available, according to analysts.

“We’re in negotiations right now (and) finalizing,” Bob Mudge, Verizon’s head of FiOS, told Reuters. “I feel very confident we’ll have a wide set of digital distribution content.”

The executive promised a subscription service and “other options” with the “right pricing” to compete but declined to give details of the service or to comment on how much it would cost Verizon, which has already spend about $23 billion upgrading its copper network for its FiOS TV and Web service.

Verizon and Coinstar will need to invest heavily to convince Hollywood studios to participate to create a service comparable to Netflix, said Hudson Square Research analyst Daniel Ernst.

“The question is, how much are they investing to get a large library of programming? Netflix is spending up to $1 billion a year on content,” said Ernst. “For me, it’s doubtful that these two companies will invest to that level.”

According to regulatory filings Redbox will make an initial capital contribution of $14 million in cash, implying that Verizon would contribute around $26 million.

As Netflix has shifted its emphasis to instant-view streaming from its mailed DVD rental service, it has had to write ever-heftier checks to content.

Coinstar earnings got a lift from the negotiation of better credit-card rates. A strong movie slate also helped it post fourth-quarter revenue of $520.5 million, surpassing the $498 million Wall Street had expected.

THE CONTENT GAME

Verizon did not disclose how many of its FiOS TV programming partners, if any, had agreed to make video content available for the streaming service. The partnership follows a December 6 Reuters report that Verizon was planning a streaming video service.

To help market the online service inside and outside the FiOS region, Mudge said he is hoping to tap into the loyalty of Coinstar’s 30 million customers who rent an average of about 1.9 million movies a day at Coinstar’s 35,000 kiosks in places like supermarkets and gas stations.

Netflix had 24.4 million U.S. subscribers at the end of December, while Verizon ended the year with 4.2 million FiOS TV customers. Coinstar rents out DVDs at $1.20 a day and Blu-Ray discs for $1.50 a day.

Coinstar sees an online offering as an important expansion beyond the roughly 200 recent-release movies the company offers at any given time, CEO Paul Davis said.

“What our consumers would like is access to a much broader array of options,” Davis told Reuters, adding that most CoinStar customers have Internet connections. “We’re focused on new releases. … Once it’s in the box a few months we pull it out.”

The venture — to be 65 percent owned by Verizon and 35 percent by Redbox — will offer its first products in the second half of 2012, the companies said. It will be managed by a board consisting of three Verizon appointed managers and two appointed by Redbox.

Pacific Crest analyst Steve Clement said it was too soon to judge whether the venture will be a success.

“We don’t know what kind of content they’ll have available, what they’ll pay for that content and what they’ll charge for it,” said Clement. “There’s way more questions than answers at this point.”

He noted that a big part of Netflix’s success was due to its easy user interface and recommendation of TV shows and movies based on its subscribers viewing history.

Shares of Netflix closed up 2.2 percent at $129.25 on Nasdaq. Coinstar ended up 1.8 percent at $50.56 after pulling back from an earlier increase of about 7 percent. Verizon edged up 0.8 percent to $38.14 on the New York Stock Exchange.

The statement is in direct response to contract agreement between the two companies that ended in February. In an effort to boost lagging DVD sales, film studio Warner Brothers decided earlier this month to delay all new releases from becoming available through many popular movie rental services, like Netflix, Blockbuster, and Redbox. This means the rental services must wait 56 days after a new Warner Brothers DVD hits retail store shelves before it’s able to begin renting it out to customers.

Of course, the video rental companies can get around the 56-day delay stipulation, but it requires them to purchase all new DVD releases at full retail price rather than a discounted, wholesale rate. In doing so, however, it would raise a rental company’s operating costs and ultimately dip into its profits.

Yet, that’s exactly what Redbox intends to do.

“Redbox will continue to provide our consumers with affordable access to new release movies from all major studios including Warner Brothers at our more than 28,000 locations nationwide. We will work to provide Warner Brothers’ movies through alternative means,” wrote Redbox SVP of Marketing and Customer Experience Gary Cohen in the statement.Redbox maintains direct working relationships with every other major studio.”

While this may seem like a declaration of war from Redbox to Warner Brothers, it’s more or less just a smart business decision. The company realized that delaying these new releases for an extended amount of time would have an adverse affect on its ability to generate revenue. It could be as simple as Redbox not wanting disappoint its loyal repeat customers. Or, it could be as calculated as determining that the potential financial loss from losing rental sales was greater than the cost of spending more on the actual DVDs.

Speaking of business decisions, Warner Brothers is making a bad one by imposing a delay to rental companies. In fact, since it has the potential to raise those rental companies’ costs, it will push them closer to extinction – and eventually eliminate a healthy source of revenue to movie companies like Warner Brothers.

Source:

http://venturebeat.com/2012/02/01/redbox-no-dvd-delay/

Redbox’s kiosks are now the leading source of physical DVD rentals in the U.S., and video-on-demand accounts for one out of three paid movie rentals.

“Brick-and-mortar retail stores continue to cede movie-rental market share, as kiosks and digital-streaming rentals become more accepted by consumers,” said The NPD Group Thursday.

“There’s no doubt that Redbox has been the largest beneficiary of the collapsing brick-and-mortar store rental business, especially with ongoing Blockbuster store closings and the fact that there are also fewer independent stores than the prior year,” said Russ Crupnick, senior vice president, industry analysis for The NPD Group, in a release.

Netflix remains the “dominant provider of paid digital movie rentals, posting a 55 percent share in the fourth quarter of 2011, though Netflix’s share is down somewhat from the company’s peak of 59 percent” in the second and third quarters of last year, according to the The NPD Group.

The research firm said U.S. consumer rental of movies in DVD and Blu-ray disc formats fell by 11 percent in 2011 from 2010. The leader for actual disc rentals was Redbox, which saw its unit volume up by 29 percent in 2011 over the year before.

Some consumers may have been driven to Redbox or video on demand after giving up on Netflix, whose price hikes last year angered consumers.

The company’s “share erosion may have resulted from their recent well-publicized challenges with pricing, and from their now defunct Quikster (DVDs-only) experiment,” Crupnick said. “However, they are in the process of shifting customers to their Watch Instantly option, so not all of the physical movie rental share drop is a net loss.”

The movie rental market is “clearly undergoing a sea change, as consumers become better equipped to access on-demand and streamed movies and are more comfortable with available delivery options,” he said. But, he added, “Even so, renting physical discs from now-ubiquitous kiosks in grocery stores and other venues has taken the lead as the most popular movie-rental method in the U.S.”

“Now-ubiquitous” is right, for Redbox. You can’t, it seems, go a block or past a grocery store or drugstore without finding the red kiosks, almost as prevalent as Starbucks. One down side is that when you’re at the kiosk, if something goes wrong during the purchase process, you can be stuck (despite an 800 number to call that often results in a long, long wait) — something you don’t want to do standing near a parking lot.

Source:

http://technolog.msnbc.msn.com/_news/2012/01/19/10191364-redbox-rentals-on-demand-are-how-we-like-our-movies

With Netflix expected to lose 2.6 million to 3.6 million subscribers in the current fourth quarter, Redbox could realize incremental revenue of about $160 million as a result, an analyst said.

When Netflix implemented a 60% rate hike in September to its combined disc and streaming rental program, subscribers reacted negatively — with 300,000 more abandoning the service than Netflix’s projected third-quarter (ended Sept. 30) loss of 800,000 subs.

Eric Wold, analyst with B. Riley & Co. in Santa Monica, Calif., believes Netflix’s defections could reach 4.7 million, which he said represent upwards of $445 million in disc rental revenue up for grabs.

In a Nov. 16 note, Wold surmised that the majority of the aforementioned defectors would downsize their monthly rental activity since a-la-carte rentals carry a higher perceived cost than a monthly subscription.

Indeed, the Netflix exodus occurred in large part due to the perception among subscribers that the value of its $9.99 combined disc and unlimited streaming rental program could not be replicated by Netflix’s separate $7.99 monthly disc and streaming program.

“Once that subscription plan was eliminated (or essentially priced up 60% to $15.98), we believe the attractiveness of a $7.99/month DVD-only plan for the casual renter was dramatically diminished given the growing availability of Redbox rentals for $1 a day,” Wold wrote.

With Redbox parent Coinstar acknowledging that 20% of Netflix subscribers also use Redbox, Wold said a large percentage of the remaining disenchanted Netflix subscribers would likely downsize their rental activity to about one to two discs per month at Redbox kiosks generating $50 million to $80 million in incremental annual pre-tax earnings.

“In our opinion, this potential upside is not fully reflected in either our or consensus 2012 expectations at this point,” Wold wrote.

Source:http://www.homemediamagazine.com/netflix/analyst-netflix-s-sub-drain-equals-160m-redbox-gain-25679

The Los Gatos, Calif.-based Internet video company on Monday said it was raising $400 million in cash and warned of a loss in 2012 amid stagnant revenue and increased investment in its international business. Netflix said revenue would be flat until its subscriber base rises, but wasn’t certain that such growth would happen.

The announcements come after a months-long rough spell for Netflix. Customers and investors howled after it raised prices on a popular subscription plan by 60% in July, and when it announced in September a since-aborted plan to separate its DVD-rental-by-mail service into a separate business called Qwikster.

Shares, down 63% over the past 12 months, fell 6.8% to $69.42 in Tuesday morning trading. They fell as low as $69, their lowest point since February 2010.

Credit Suisse said it expects Netflix’s $400 million sale of stock and convertible bonds will dilute existing shareholders by about 10%. “This may place some near-term pressure on the stock,” it said in a research note. “However, we are positive on the capital infusion, as it strengthens NFLX’s balance sheet and improves its financial flexibility.”

Netflix is selling off stocks and bonds in an attempt to raise $400 million, illustrating how acquiring the video content is expensive, Deal Journal’s Shira Ovide reports on Markets Hub. Photo: Getty Images.
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Netflix spokesman Steve Swasey said Monday that the company doesn’t have a pressing need for more cash, “but it’s always nice to have more money than you need.” He said the company has no immediate plans to use the funds. He added that subscriber cancellations have continued to decline, meaning that Netflix could soon see its subscriber base grow.

But Janney Capital Markets analyst Tony Wible said the issuance should raise concerns for investors that also play into his growing concern about the disparity between DVD and streaming profitability.

“Investors need to ask why one of largest subscription-based platforms in the world needs capital,” he said. “The lack of profitability on almost 23 million global streaming subs suggests that this business may not be as lucrative as the bulls believe.”

Write to Shara Tibken at shara.tibken@dowjones.com

Read more: http://online.wsj.com/article/SB10001424052970204443404577054040663461880.html#ixzz1eSRxkv1y

Spurred by a 52% year-over-year increase in households with Blu-ray Disc players, consumer spending on home entertainment increased 5% in the third quarter (ended Sept. 30) — the first quarterly increase of home entertainment spending since the first quarter of 2008, according to the latest data from DEG: The Digital Entertainment Group.

Blu-ray-enabled households now total 33.5 million, with consumer spending on the high-definition packaged-media format up 58% in the quarter, compared with the same period last year. The surge is due in part to a 60% jump in sales of catalog Blu-ray releases, led by Star Wars, Citizen Kane, Scarface and The Big Lebowski, among others.

Electronic sellthrough of new-release movies increased 13% in the quarter.
Overall, sellthrough for DVD and Blu-ray movies declined 4% to more than $1.7 billion, compared with $1.8 billion last year. When combined with electronic sellthough, sales of movies dropped less than 3% from the same period last year.

In addition to electronic sellthrough, transactional video-on-demand increased nearly 5% to $419 million, compared with $400 million last year. Subscription streaming revenue topped $255 million.
Traditional brick-and-mortar video store rental revenue dropped more than 28% to $353 million from $495 million last year. It marks the first time that transactional VOD revenue surpassed traditional video store rental revenue. At the same time, subscription rental of DVD and Blu-ray increased nearly 5% to $607 million from $579 million. Kiosk revenue, which includes Redbox and Blockbuster Express, surged 23.3% to $414 million, compared with $335 million last year.
Total rental revenue, excluding VOD, declined 2.4% to $1.37 billion from $1.4 billion. With VOD, total rental revenue declined less than 1% to $1.79 billion from $1.8 billion.

Heading into the all-important fourth quarter, the DEG is confident that theatrical blockbusters entering the retail channel, including Captain America: The First Avenger, Cars 2, Cowboys & Aliens, The Hangover Part II, Harry Potter and the Deathly Hallows — Part 2, The Help, Kung Fu Panda 2, Rise of the Planet of the Apes, The Smurfs and Water for Elephants, will continue the positive trend into 2012.

NORTH HOLLYWOOD, Calif. — There was something apropos about the dozen or so pennies sitting in plain view atop a Redbox kiosk in front of a 7-Eleven here.

Consumers rented and returned for an hour Halloween night, the first day Redbox’s price jumped 20% to $1.20 a day, and the pennies were never touched. Just like those pennies, consumers paid little heed to the 20 more cents they were paying for a Redbox DVD rental.

“I still think it’s cheap,” said George Alonzo, a 50-something local resident who was returning two titles his son had rented. “We get everything from comedy to action, stuff for the kids. We’ll keep renting.”

Jose Villanero, a 28-year-old local who’s been using Redbox “for years,” was there to rent, and he didn’t know about the price increase. And he didn’t bat an eye when the $1.20 rental fee showed up.

“I usually get them back the next day, so I’m not worried about it,” he said. “Absolutely, it’s still a decent price.”

Investors and industry observers seem to agree, with many suggesting Redbox won’t see nearly the blowback Netflix encountered when it raised its combined DVD and streaming rate by 60%, charged separately for those services, and attempted to split them (with the last plan aborted after consumer feedback). Oct. 24 Netflix said it had lost 810,000 net subscribers in the United States during the third quarter, ended Sept. 30.

“A 20% increase in price for the [Redbox] customer is negligible when in actual dollars, it is a 20-cent-per-night increase,” wrote full-time investor Joseph Poma for SeekingAlpha.com. “For Coinstar though, a 20% increase in price will yield a tremendous increase in revenue over the subsequent quarters. I don’t anticipate any drop off in sales due to the price increase, and I anticipate increased growth even during the holiday season.”

Sean Portnoy, a technology writer for ZDNet.com, wrote that Redbox’s price increase might actually be in direct response to Netflix’s woes.

“Redbox may be a little sneaky trying to drop this fee increase in while one of its main competitors is suffering a PR disaster for raising rates, but that’s also a good way to avoid some of that same heat,” he suggested.

As for Redbox itself, Paul Davis, CEO of Redbox parent Coinstar, used caution when announcing the price hike Oct. 27.

“We remain committed to providing Redbox consumers access to the latest movies at an incredible value. This marks the first price increase for a Redbox standard-definition DVD rental in eight years,” he said. “We didn’t make the decision lightly.”

Source:

http://www.homemediamagazine.com/redbox/consumers-not-too-concerned-over-redbox-price-hike-25522

The plot twist emerged Thursday in Coinstar’s latest quarterly report. The company’s earnings nearly doubled, largely because of robust growth at Redbox’s more than 34,000 rental kiosks.

But the strong performance was upstaged by Redbox’s decision to raise prices for standard DVDs by 20 percent beginning Monday.

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The new rental rate will be $1.20 per day, instead of the current $1 daily rate. Redbox prices will remained unchanged for Blu-ray discs at $1.50 per day and video games at $2 per day.

Redbox’s change isn’t as jarring as what Netflix did last month, when it hiked prices as much as 60 percent and then irked subscribers even more by announcing a now-aborted plan to split its DVD rentals from its Internet video streaming service.

But it spooked investors, especially because Redbox appears to be picking up customers still stewing over the higher prices at Netflix. Coinstar’s shares plunged 10 percent in Thursday’s extended trading.

Unlike Netflix, Redbox tested the price increases in several cities during the past year to see how they would change rental patterns. Management concluded there only would be a slight drop-off in DVD rentals.

“We didn’t take this lightly,” Coinstar CEO Paul Davis said in a Thursday interview with The Associated Press.

Coinstar, which is based in Bellevue, Wash., is charging more to help offset higher expenses for DVDs and processing debit card transactions.

Netflix raised its prices in hopes of generating more revenue to license more movies and TV shows for streaming over high-speed Internet connections. The plan backfired, though, leaving Netflix on track to start losing money next year as it tries to repair a badly damaged brand.

Coinstar Inc. earned $37.1 million, or $1.18 per share, in the three months that ended in September. That compared with $19.5 million, or 60 cents per share, at the same time last year.

The results for the latest quarter blew by the average estimate of 88 cents per share among analysts surveyed by FactSet.

The company’s revenue rose 22 percent from last year to $466 million, about $3 million above analyst projections. The Redbox kiosks were Coinstar’s main attraction; revenue in the rental division climbed 28 percent in the quarter to $390 million.

Although Davis said the company couldn’t know for certain, it appeared Netflix’s customers losses are turning into Redbox’s gains.

As an indication that more people may have been renting from Redbox for the first time, Davis told The Associated Press that the number of unique credit cards used at the kiosks in July through September increased by 8 percent from the previous quarter.

By Coinstar’s reckoning, Redbox surpassed the market share of Netflix’s DVD-by-mail service for the first time during the third quarter. Coinstar said it ended September with a U.S. market share of nearly 35 percent compared to 33 percent for Netflix and other DVD-by-mail services. A year ago, Coinstar pegged its market share at 24 percent with Netflix and other DVD-by-mail services at nearly 36 percent.

Netflix expects the shift to continue as it focuses more on its video streaming service. Netflix predicted it may end December with 10.3 million DVD subscribers, down 25 percent, or 3.6 million, from the end of September.

“We always try to roll out the red carpet for customers who may feel disenfranchised,” Davis said during an interview with the AP.

With another potential influx of former Netflix subscribers looming, Coinstar expects its revenue to rise as high as $510 million in the fourth quarter. But the company doesn’t expect to make as much money in the holiday season as it did in the third quarter because a slew of year-end DVD releases of popular movies will drive up its expenses. Coinstar predicted its fourth-quarter earnings will range from 57 cents per share to 67 cents per share.

Analysts had projected fourth-quarter earnings of 78 cents per share on revenue of $483 million.

Coinstar’s shares fell $5.30 to $47.65 in extended trading after the results were released. If the sell-off holds in Friday’s regular trading, it will wipe out most of the gains Coinstar’s stock has made since Netflix raised its prices.

© 2011 AP DIGITAL

With customers clamoring for inexpensive entertainment, revenue is soaring for $1-a-day movie rental kiosks, prompting increased demand for DVD vending machines in supermarkets, restaurants and high-traffic locations such as university campuses. Experts predict the DVD industry’s phenomenal growth will continue this year.

Movie kiosks are on track to make up nearly 30 percent of the U.S. video rental market in 2010, according to a recent report issued by the NPD Group, a global provider of consumer and retail market research information.

“Consumers are obviously responding positively to the perceived value of $1-per day rentals, and they appreciate the convenience offered by video rental kiosks,” Russ Crupnick, vice president of industry
analysis for NPD, said in a press release announcing the report.

Download the full whitepaper here:

Tapping into the Automated DVD Rental Kiosk Market

DVD kiosk rentals made up 31 percent of all video rentals last year; and industry experts expect the $20 billion DVD rental industry to keep growing, a prediction that Jennifer Wagner is betting on.

The mother of three launched her own DVD kiosk business through DVDNow, a company that provides business owners kiosks, training on how to run a DVD business, the software to run the business as well as marketing and maintenance support. The operator’s investment is $20,000, but there are no monthly franchise fees.

Wagner, who launched her Pik ur Flik in April is one of DVDNow’s 1,100 partners and currently has three machines operating inside convenience stores in Minnesota.

Although DVDNow offers online, over-the-phone and onsite training in its Canadian home office, Wagner and the company’s other partners obviously don’t have the same manpower behind their businesses that the industry’s biggest players have (redbox or NCR’s Blockbuster kiosks, for example).
Wagner, however, is making the most out of two advantages:

Advantage No. 1 — Though she may do 99.9 percent of the work — answering phone calls and emails, stocking kiosks, designing marketing material — Wagner doesn’t have to wait the 28 days before selling new releases like her main competitors. Advantage No. 2 — Wagner has another revenue source; she sells advertising on her kiosks.

Running the business

Although Wagner’s husband, Mike, helps run the business, she’s basically a one-woman show, running the entire business from her iphone and desktop using DVDNow’s software to organize everything from coupon codes, memberships and trailers, to transactions and inventory. DVDNow Connections, the back-end Web-based software platform that supports the kiosks, runs on multiple servers in locations throughout the United States and communicates with DVDNow kiosks around the world over the Internet.

“The real-time information exchange keeps operators up-to-date with everything that is happening in their business,” said Yurika Kuroki of DVDNow. “The system automatically gathers and analyzes rental data from the kiosks so it can generate customizable reports to help run a better business.”

It can also identify DVDs that should be marked for sale from the kiosk as well as upload and manage movie trailers and video commercials.

Wagner, like all DVDNow business owners, pays the stores that house her kiosks a commission of her DVD rental income; in turn they allow her to plug in the machine. She takes care of the rest.

“I am Pik ur Flik, which means, I am working harder for my customers and store locations than anyone else,” Wagner said. “I do well when my customers are happy and I put all my effort in to making that happen.”

New Release that are not yet available from Wagner’s competitors cost her customers $1.99 for the first night; Blu-rays of those same titles are $2.49. Movie titles that are not new releases are 99 cents for the first night. (Wagner immediately drops the price of all movies to 99 cents the day they become available at redbox,ect.) All movies are $1.49 each additional night out.

Why wait?

Although the agreements that major Hollywood studios have in place with major players in the entertainment distribution industry mean that those companies may eventually have access to more copies and better pricing on movies, it also means that most independently owned operators have a 28-day competitive edge.

“I’m able to provide several new release titles to my customers before redbox, Blockbuster and Netflix/Qwikster,” said Wagner. “They are concerned about the Hollywood studios. I am concerned about my customer.”

The fact that the major movie houses don’t see independent DVD kiosk owners as a threat, meaning there are no deals making them wait to release new movies, is a major advantage over the big names, like redbox, said Lee Holman, lead retail analyst at IHL Group.

“If the (independent) DVD kiosk owner can do that without violating any ‘home use’ or ‘rental use’ restrictions, then certainly that can keep them ahead of the game, as long as redbox and Blockbuster hold to their 28-day requirements,” Holman said. “Something tells me it won’t last long, though,” he said.

Advertising options

Wagner, who also owns her own marketing and design business, sells advertising on the kiosks in three different formats: side-panel print ads, jewel case insert print ads and video commercials that play between trailers on the 32-inch flat screen on top of the kiosks. About 60 percent of her revenue comes from selling advertising.

“My goal is to streamline the advertising contract/design/implementation process to make it as easy as possible for my clients,” she said. “Not only can they purchase space on the kiosk, but I am also able to write and design the ads for them as well should they choose. Can you advertise on a redbox kiosk? Nope.”

The growth plan

Wagner wants to grow her business but has no plans of expanding beyond her means.

“I have learned, in a very short time, there are more locations wanting my kiosks than I can commit to at this time,” she said. “To effectively do this business, you need to work at it, and I have been successful thus far in branding my business and getting the kiosks known.”

That branding success has inspired stores in her area to partner with her to operate kiosks under the Pik ur Flik brand; discussions to close those deals are underway.

“I can be a huge asset to these store owners if I take care of day-to-day operations of the kiosks, stock movies weekly, and sell and place advertisements,” Wagner said. By increasing the network size of Pik ur Flik — the purchasing power becomes more competitive and efficient; advertisers are able to canvas a much larger geographic area; and customers have more choices when it comes to renting and returning movies anywhere within the Pik ur Flik kiosk network.”

DVDNow also expects growth, said Kuroki about the company’s 3,000 kiosks spread across most states, Canada, England, Netherlands, Mexico and South America.

“Our goal is to expand our network to everywhere in the U.S.; there are a couple states that we’re not in yet,” she said.

Is there room in the market for more DVD kiosks?

It may be a difficult challenge, according to Soheil Samimi, president of iMOZI, a DVD kiosk company, to deploy new successful DVD kiosk businesses, but it’s possible if done correctly.

“The market in the U.S. is certainly more saturated than it was a short couple of years ago,” he said. That being said, plenty of good opportunities still exist for the smaller independent operators, he said. “They need to be diligent, however, in their selection of the kiosk placement, as well as the ongoing operations and promotional methods used to grow their business.”

A new operator must also deliver more convenience or general value to the average customer in order for their kiosks to be in demand, Samimi said. He suggested looking at new kinds of locations, such as university campuses or good regional retailers serving secondary towns/market.

“This kind of environment also allows for a local provider to be more active and visible within the community,” he said.

Source:
http://www.kioskmarketplace.com/article/185699/Independent-DVD-kiosk-operators-fight-for-market-share