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Is It Time to Give Video Vending a Look?

27 Apr, 2003 By: Kurt Indvik

Is it time to add video vending machines to the list of options retailers have to growing their business? Well, perhaps it's too early to tell, but there has been a recent flurry of activity in the space, as chronicled in this week's issue of Video Store Magazine. DVD has spurred interest in video vending by specialty and non-specialty retailers alike.

“It's a continuation of the channel blur,” Jeff Lenard, spokesman for the National Association of Convenience Stores told senior editor Holly Wagner.

The variety of systems and services being developed for sale, lease and franchise in the video vending category and the number of locations where something like this might work could be both an interesting opportunity for established rentailers as well as a competitive threat from other retail sectors.

There is no analysis yet available as to whether or not the video vending model is generally successful, but Blockbuster, as one example, has been active with video vending in Europe for a number of years in locations such as gas stations and grocery markets, and in Israel with machines placed outside some of their stores to extend their hours of business.

Indeed, the idea of using vending machines to extend one's business is an attractive possible alternative to, say, opening another store to reach into another market. By seeking out locations that combine foot traffic and the convenience factor, specialty retailers can also compete with their retail brethren in supermarkets, for instance, who have those attributes built into their business who are in the rental business now.

I also like the idea of the machine extending one's business hours, particularly in the morning. Many video stores open their doors at 10 am or later, and perhaps by having a vending machine outside their store, people on their way to work may take a moment to grab a video for that evening, instead of having to take the trouble to stop after work to rent a video when they'd rather be heading right home.

Video vending has been around for a while, but perhaps with DVD's size (and selthrough pricing) making it possible for these machines to have a larger inventory, the financial model for vending has improved. It's worth considering. We'll have to see how this concept progresses.

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