NCR Reports Q1 Loss of $15M24 Apr, 2009 By: Chris Tribbey
NCR Corp. April 23 reported a first-quarter operating loss of $15 million, compared to profits of nearly $50 million during the same period of 2008.
However, NCR executives maintained an upbeat attitude in a conference call with investors after announcing earlier in the week the company has acquired TNR Holdings Corp., which operates more than 2,000 The New Release and MovieCube DVD kiosks.
The acquisition will boost NCR’s and Blockbuster’s effort to bring roughly 10,000 Blockbuster Express DVD kiosks to market this year.
NCR had been a minority investor in TNR since mid-2008, when TNR tapped NCR to be its supplier of self-service technology. Blockbuster announced last August that it had partnered with NCR to bring more than 10,000 DVD kiosks to market by the end of 2009, to compete with companies such as Redbox, DVDPlay and TNR.
“You have heard me say that entertainment can be the most attractive of the new vertical opportunities we are pursuing,” said NCR chairman and CEO Bill Nuti. “Analysts believe self-service transactions via entertainment kiosks can be a $1 billion business by the end of next year.”
EVP John Bruno said the company is seeing a shift toward self-service in the DVD rental market. “We expect this is going to accelerate the shift to DVD kiosks over time. … TNR is the second largest operator of DVD kiosks in the U.S., and the acquisition … allows us to stimulate demand for our solutions offering.”
In total, NCR plans on a total of 30,000 rental kiosks in the next “several years,” Bruno said, with NCR investing $60 million toward that goal this year.
“Execution of a full-service operator model has the potential to generate more than $1 billion in annual revenue within the next five years,” Bruno said. “We expect the business to be profitable over the next 2-3 years.”
Current No. 1 kiosk operator Redbox — which is owned by Coinstar — operates more than 12,000 DVD kiosks nationwide.