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DVD Kiosk Makers See Burgeoning Market For Vending Route Operators

Posted On: 10/27/2010

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Flix Kiosk Co., Neal Singer, Signifi, DVD rental kiosk, DVD vending machine, vending, vending machine, vending machine business, kiosk business, vending machine operator, coin machine business, coin-op news, Redbox, Coinstar, Blockbuster, NCR, self-service kisok, automated retailing, automatic merchandising, Firestone Financial Corp., Paramount Financial Services, VPD, Source Interlink

Flix Kiosk DVD Machine

SCHAUMBURG, IL -- Two DVD rental kiosk manufacturers say vending and amusement route operators are in a prime position to cash in on the growing opportunity in the DVD rental kiosk space. Flix Kiosk Co. and Signifi have teamed up to create and offer a turnkey program to help vending and amusement companies get into the DVD rental market on the ground floor.

Flix Kiosk president Neal Singer said his company and Signifi are among a few organizations trying to bridge the gap between the kiosk and vending and amusement industries, which all use similar technology but different suppliers.

Singer said that the timing could not be better for route operators to add DVD rental kiosks to their businesses. He cites the closure of Hollywood Video last spring and Blockbuster's recent bankruptcy dramatically reducing the number of traditional rental stores and prompting consumers to seek other new options.

"Since the bankruptcy of Blockbuster in September, there is an estimated $1.5 billion of video rentals that needs a new distribution channel," Singer said. He said that the success of Coinstar's Redbox, which offers $1 DVD rentals through bright red kiosks at 24,000 locations throughout the country, suggests that self-service machinery will be a primary channel for the rental and return of DVDs, Blu-rays and videogames.

Flix Kiosk began manufacturing its DVD kiosks near its Schaumburg, IL, headquarters almost three years ago. They are fabricated by Grand Products of Des Plaines, IL. Toronto-based Signifi, the technology development firm and self-serve retail solution developer that provides Flix Kiosk's software, began producing its line in Canada around the same time.

The two firms recently formed a partnership in which Flix Kiosk markets and distributes in the U.S. a full range of models from both companies. Singer said kiosk lines of both companies can fit perfectly in sites operators currently serve, or open the doors to new locations.

Flix Kiosk's low-profile FDR300 can hold up to 300 DVDs, Blu-rays and videogames. It's reportedly ideal for a largely untapped market of smaller locations typically not served by movie-rental giants Redbox and NCR. It measures a compact 24" wide by 24" deep by 60" high. Singer, who also operates Flix Kiosks in the greater Chicago region, said the FDR300 can be placed in a wide range of locations, including office buildings, apartment complexes, colleges and stores of all sizes.

Patrons make their DVD, Blu-ray or videogame selections on the machine's touchscreen interface and pay by credit card. Rental fees range from 99¢ to $1.99. The 17" LCD continually runs movie trailers and information. Another screen on top of the kiosk can display secondary advertising content, remotely administered, and become an incremental revenue source for the operators.

Signifi Solutions' modular DVD rental kiosk system, similar in operation and design to Flix Kiosk's machines, offers the flexibility to grow from 300- to 7,000-disk capacities. Operators who begin with a single station facing one patron can easily add a module to create a two-station, double-sided kiosk that serves two patrons at once and shares inventory. The modular unit can grow to service up to six customers simultaneously, requiring significantly less square footage and lower capital investment than placing multiple standalone units.

Expanding opportunities for operators, Signifi recently introduced a weather-protected module for outdoor placement. It consists of an overhead canopy and automated cooling and heating system that can be added to any kiosk. Signifi officials say the added convenience and visibility of outdoor kiosks produces a 50% to 150% sales lift.

The end-to-end Signifi software solution incorporated into its kiosks, and those manufactured by Flix Kiosk, includes Web-based backend, inventory and customer-management tools. It also includes Esprida's remote management platform for real-time reporting and advanced analytics, which is widely used in the digital signage and kiosk industry. A digital signage management system controls the dedicated advertising LCD screen.

The turnkey program from Flix Kiosk and Signifi addresses equipment financing and inventory. Operators can lease through Firestone Financial Corp. or Paramount Financial Services. DVDs, Blu-rays and videogames are supplied through wholesalers like VPD and Source Interlink.

"The model with our DVD kiosks is similar to the jukebox business before it went to digital download," Singer observed. "Machines typically need to be serviced every two weeks. You remove the old videos and add new ones." Inventory records are automatically updated. The two kiosk companies maintain a statistical database to help operators stay current by merchandising the most popular mix of movies.

Each movie in the machine is identified and tracked by an RFID tag. When a customer rents a movie, it is scanned and removed from the inventory. Once the movie is returned to the DVD vending machine, the tag is scanned and the disc placed back into inventory.

"The machines require very little extra work beyond rotating the inventory, since 85% to 95% of service issues are software related and can be resolved remotely," Singer pointed out.

Flix Kiosk and Signifi will be showing their rental kiosks during the upcoming IAAPA Attraction Expo, which will be held Nov. 15-19 in Orlando, FL.