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Blockbuster partner buys DVDPlay, heating up competition with Redbox

December 10, 2009 |  4:08 pm

BBkiosk

They should just call it Bluebox and really have at it.

NCR Corp., which is expanding aggressively in the DVD rental kiosk business via a partnership with Blockbuster Inc., has acquired competitor DVDPlay in a bid to catch up with market leader Redbox.

NCR, which manufacturers self-service retail devices such as ATM machines and grocery store checkout devices, will put the Blockbuster brand name on its $1-per-night DVD kiosks via a partnership with the struggling home video chain.

The Blockbuster kiosks will be painted blue, in contrast to the red-colored Redbox kiosks.

DVDPlay, currently the No. 3 competitor in the market, has about 1,500 kiosks deployed, including about 1,000 in Los Angeles. With the addition of its machines, NCR will have about 3,800 in the market by the end of the year. Redbox, by contrast, will have more than 22,000 around the country.

By next year NCR is aiming to have roughly 10,000 kiosks in stores.

"Without a doubt there's a new kid on the block," said NCR Vice President and General Manager Alex Camara. "We have an ambitious and strong strategy and we're really going after the competition."

Many DVDPlay kiosks are in Safeway grocery stores, giving NCR an immediate presence at one of the West Coast's biggest retailers.

NCR kiosks hold about 900 discs each, compared to 700 in those of Redbox. Camara said that the higher capacity, along with digital signage on the kiosks, give it an advantage. However, the Blockbuster-branded kiosks don't yet offer online reservations, which Redbox does.

Unlike its bigger competitors, NCR is not currently in court with Universal Pictures, 20th Century Fox and Warner Bros., all of which have refused to sell new release DVDs to kiosk operators unless they agree to more costly deals. Like Redbox, NCR is currently stocking new releases from those studios by purchasing them at retail.

Camara said he is eager to strike a deal to offer new releases from every studio and would be willing to consider charging more than $1 per night in certain cases if necessary to make it happen.

--Ben Fritz

Photo: A Blockbuster-branded DVD kiosk. Credit: NCR Corp.

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