Blog Post

Coming Soon to Your Safeway: Blockbuster

Blockbuster (s BBI) partner NCR (s NCR) said today it’s acquired DVD rental kiosk chain DVDPlay, adding 1,300 kiosks to the company’s growing rental station network. Terms of the deal weren’t disclosed. Much like market leader Redbox, DVDPlay offers 24-hour rentals for $1 at kiosks located in Safeway (s swy) stores and other grocery chains. NCR will re-brand the kiosks as Blockbuster Express outlets.

Vending machine maker NCR formed a partnership with Blockbuster to take on Redbox about a year and a half ago. But they took their time with the roll-out, giving Redbox, which now operates more than 20,600 kiosks around the country, a big lead. Lately, however, NCR and Blockbuster have been trying hard to catch up, with NCR saying last week it plans to deploy 200 rental machines in New York. With the DVDPlay buy, the company now estimates that it will operate more than 3,800 kiosks by the end of the year.

DVD rental kiosks have been a controversial topic for the industry. A recent study by the Los Angeles Economic Development Corp. estimated that Redbox, with its ultra-cheap rentals, will cost Hollywood $1 billion in revenue alone. Redbox, on the other hand, claims that the big studios are sabotaging its business, and has taken three of them to court this year. And then there are scrappy upstarts like Big Box DVD, which is trying to undercut its competition by offering rentals for 6 cents an hour.

NCR plans to eventually let consumers download movies on memory cards, an idea Blockbuster CEO Jim Keyes has been talking about for a while. Redbox SVP of Marketing and Customer Experience Gary Cohen told us at NewTeeVee Live that his company has started to experiment with digital downloads as well.

7 Responses to “Coming Soon to Your Safeway: Blockbuster”

  1. Nomo Blockbuster

    Blockbuster is a pro at taking ideas from other companies and then coming out with its own version of that idea. First Netflix, then Blockbuster by mail. First Redbox, then Blockbuster Express. It’s pathetic.

    NCR’s CFO resigned in October which spelled bad news for the NCR/Blockbuster partnership. Why NCR would even think of partnering with Blockbuster in the first place is anyone’s guess. CEO Keyes certainly doesn’t seem to be making things any better for Blockbuster. He has authorized the closure, or ‘transformation’ in CEO terms, of hundreds of Blockbuster stores. It looks like the stores are not such a ‘cornerstone’ after all and Blockbuster just gave up on its last hope of staying alive.

    These Blockbuster kiosks are a fruitless attempt to do what other companies have already succeeded in. Get with the program, Blockbuster. Some kind of advantage is essential for survival, and you have NONE.

  2. So right after the L.A. Economic Development Corp. releases a study saying that RedBox (with it’s “evil spawn from hell” $1/night rentals) is going to cause Hollywood to collapse, Earth to explode and humanity to go extinct…a couple of big guns like Blockbuster and NCR jump in with their own blue box $1/night rentals?

    Big Hollywood studios, the boxes are here to stay. Game over. Quit complaining.


    Bite Me TV

  3. nickpepito

    Note the mention of controversy around Kiosk DVD rental (mainly Redbox). Curious how the deals Block Buster has worked out with the studio’s in regards to expanding their Kiosk offering.

    Studios seemingly would have to label Block Buster as a similar threat.