DVD Kiosks Coming to Bookstore Chain30 Nov, 2004 By: Erik Gruenwedel
DVD Station, a San Francisco-based upstart provider of rental and sellthrough DVD and video games, will bow proprietary turnkey kiosks to 300 college bookstores from 2005 through 2007, according to sources familiar with the initiative.
Currently testing at Barnes & Noble stores at Ohio State University, Boston University and Florida International University in Miami, the DVD Station touchscreen kiosk allows users to peruse, rate and compare up to 5,000 titles for either rental or purchase on site with a credit card.
“We are bringing video product into grocery stores, corporate and college campuses, and other non-video locations,” said William Fischer, director of corporate development for DVD Station, who confirmed the existence of the three college campus test locations.
He declined further comment on the Barnes & Noble deal.
Other DVD Station locations include Sony's Metreon Entertainment Center in San Francisco, Grand Central Station in New York, Pathmark grocery store chains in Delaware, New Jersey, New York and Pennsylvania, and select independent coffee shops.
Rates, which vary by location, range from $1 per day rental to $2 for two days and $3 for five days. Titles must be returned to the point of rental or be assessed a $1 per day late fee.
“We are figuring out what the optimal pricing is for different delivery channels,” said Fischer, who added that once rental fees reach MSRP, the customer is sent an e-mail congratulating them on their “purchase.”
Individual kiosk pricing and revenue split varies from franchise to franchise depending on the customer traffic in the location, among other conditions.
By incorporating VerioPac packaging from Germany, a DVD Station can store up to 1,500 movie and game SKUs in a 3-foot-by-4-foot-by-2-1/2-foot (deep) filing cabinet, which is kept at the retail location.
The company claims its kiosks can generate more than $1,000 in revenue per retail square foot compared to $160 for Blockbuster and Hollywood Video.
Customer visits per month average 3.8 and speed of transaction of 5 minutes, compared to two visits and 27 minutes per transaction at Blockbuster and Hollywood, according to DVD Station.
Recently, the company built a drive-through kiosk location for Movie Gallery near its headquarters in Dothan, Ala., with DVD and VHS titles that are inventoried in real time, allowing the customer to see the top 50 titles in stock.