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Movie Gallery Tests Vending Machines

5 Aug, 2005 By: Holly J. Wagner

While all eyes in the DVD vending universe are on the McDonald's Redbox, Movie Gallery has been quietly testing the machines in some markets and may eventually roll out branded models in different settings.

“We have been, in the past 18 months, experimenting with the automated vending machines,” said Movie Gallery SVP Thomas Johnson. “With an automated format, they let us go into markets that are smaller than we need for a store and into areas where we may not be able to get real estate.”

Johnson wouldn't say how many kiosks Gallery has in the field, but he did say that, to date, the machines have been part of a “methodical, systematic” test and don't carry Movie Gallery or Hollywood Video branding.

“We've tested different machines, different manufacturers, different environments. We're excited about what we see on this, but there is a lot of work to do,” he said. “That is a further extension of our brands, Movie Gallery and Hollywood. We can put these in a variety of locations, including grocery stores and convenience stores.”

As vending machines gain in popularity, he said, grocers are more interested in putting machines into their stores, and some have requested machines with an established video rental brand.

“We've got a few out there,” Johnson said. “We want to do it right. We believe we have the best machine around. Given our brand strength, we have enormous opportunity.”

With Redbox already in six markets and expanding to two more by Labor Day, and a handful of other disc vending operators with machines scattered around the country, new players may still be able to get a foothold in video vending. But the field is filling out fast.

Grocers and drug stores have been one target market. Redbox has machines in Giant, Smith's Food & Drug and Stop & Shop in the Northeast. DVDPlay has machines in Albertson's and Safeway supermarkets, in some cases renting DVDs for as little as 69 cents a night. MovieBank has machines in Duane Reade drug stores and some convenience stores on the Eastern seaboard and ELO Media has machines in Price Chopper markets in upstate New York. That puts Movie Gallery in good company for a step into vending machines, which could be used to extend hours at existing stores as well as get into new locations.

“We see it as truly an extension of the marketplace,” Johnson said. “The consumer is more and more about convenience, more and more about a quality brand. We offer that for the consumer when we roll out these machines.”

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