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E-Play Seeks to Burn With DVD Vending

25 Oct, 2006 By: Erik Gruenwedel

Alan Rudy, CEO of e-Play, an Internet-enabled kiosk that allows consumers to burn a Hollywood movie to DVD in seconds, has big plans.

His Columbus, Ohio-based company has 10 e-Play machines in operation as part of a test program at local Wendy's, White Castle and Meijer's retail centers.

Plans call for 50 e-Play machines, which include 23-inch interactive LCD touch screens that can play movie trailers on demand, to be in operation by Thanksgiving, including at the Columbus airport and on the Ohio State University campus.

Retailers are paid a percentage of the machine's gross, which Rudy said could vary from $20,000 to $80,000 per year.

But while each e-Play machine is stocked with up to 800 new release and catalog standard DVDs priced at about $20, the download-to-burn option sits idle while Rudy runs through a laundry list of unfulfilled studio demands, most notably incorporating CSS encryption (anti-piracy). He is currently working with Sonic Solutions to include its DVD-on-Demand anti-piracy software in the machines.

Vending machines hawking and renting DVDs and CDs aren't new, but devices aimed at narrowing the gap between electronic sellthrough (i.e. download to burn DVD) and brick-and-mortar retail remain at the incubation stage.

Scottsdale, Ariz.-based Polar Frog Digital this year began distributing standalone self-serve kiosks to select video stores and adult novelty retailers that let consumers create custom adult-themed DVDs in-store in about eight minutes.

Major studios remain reluctant to relinquish total control of their ‘A'-content to third parties, with the exception of Movielink and CinemaNow — two Internet services largely owned by the studios.

They also have come under pressure from Wal-Mart and Target regarding wholesale pricing offered to the nascent electronic sellthrough industry.

“The content for downloading and burning is slow to materialize,” Rudy noted. “The big issue is getting the copyright controls in order. [The studios] seem to be dipping their toes in the downloading and burning market.”

He said the e-Play machines have an advantage over CinemaNow and Movielink by delivering DVD-on-demand at a gas station, pharmacy, supermarket or airport.

“You wouldn't have to download and burn in your home and have all the right equipment and be frustrated by the whole process,” Rudy said. “As far as the consumer is concerned, they are just buying a disc. Burning to us is more of an inventory control issue than it is a convenience to the consumer.”

Independent retail analyst Dennis McAlpine said the concept would work at Wal-Mart if the content was new and the delivery time very short.

“If it takes five minutes to burn the disc, that is too long,” McAlpine said. “The consumer won't wait for it.”

McAlpine said consumers might be willing to wait if they could place a movie order on the way into a store and pick it up upon exiting. He said Wal-Mart has made a science of maximizing the sales-per-square-foot of its floor space. If one machine could supply all the DVDs Wal-Mart needed and it could satisfy the browsing needs of the consumer, then why not?

“Think of all that floor space you are giving back to Wal-Mart,” McAlpine said. “But if you don't have the product consumers want, it doesn't matter.”

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