By : Chris Tribbey | Posted: 04 Aug 2008
Polar Frog Digital, which currently has a dozen download-to-burn kiosks scattered across the United States, is aiming to add a whole lot more by the end of the year.
The company has partnered with Nero Inc. to bring Content Scramble System (CSS) encryption to its DVDs, which just might allay studio concerns that their content isn't protected. Most every DVD currently on store shelves is CSS protected.
Now all Polar Digital needs is to convince retailers — and the studios — to try the kiosks on for size.
“Now we can deliver [our product] while protecting the digital rights of the industry,” said Todd Rosenbaum, CEO of Polar Frog Digital. “We're endorsing the standards and we believe we have something unique: We're the first to offer end-to-end solutions for MOD (manufacturing on demand).”
Polar Frog boasts more than 13,000 titles from more than 100 content owners on its kiosks, but doesn't have a single major studio agreement. Besides questions over copy protection, studio representatives have said that retail support is key to them buying into any MOD system for consumers.
“Over the short-term, I don't expect much impact on physical home media products,” said Kurt Scherf, VP and principle analyst with Parks Associates. “I expect that the download-to-burn kiosks are going to be used more by retailers as a way to phase out those bargain-DVD bins you typically see near the Walgreen's check-out line. I'd expect that you'll see older titles more on these kiosks than the latest Hollywood release.
“It's going to take some time for the studios and the kiosk companies to experiment with the type of content they plan to make available through the download-to-burn efforts.”
However, he added, that title count is Polar Frog's biggest asset, comparing it to the 500 or so rental DVDs available from Redbox, or the 7,000 to 10,000 DVDs on the shelves at Blockbuster.
“Once the studios get real data back on use, on how revenues compare to the distribution costs that they're saving, etc., I think you'll see more come on board, assuming the results are favorable,” he said.
The agreement is a result of the Sept. 20 decision by the DVD Copy Control Association to allow CSS to be licensed out. While Polar Digital and Nero aren't the only involved in CSS-protected DVD MOD systems, they are the furthest along toward that dream of eliminating concerns over shelf space and sold-out new releases.
“We build and burn that DVD on the fly,” said Nero President Richard Carriere. “We're at one of those points where we're seeing a change in consumer buying habits. When you can deliver physical in a digital world, you address shelf space.
“ We are committed to liquid content creation anytime, anywhere and on any device. The experience of and ability to manufacture commercial released video DVDs on-demand, will revolutionize the retail industry.”
Currently a handful of Polar Frog kiosks are in Longs Drug Stores, and Walgreens earlier this year said it was interested in including the kiosks in its stores.
“Consumer awareness of self-serve is out there, but it has to start with volume,” Rosenbaum said. “[Thirteen-thousand titles] is great credibility to start with … . We look at this and see a 20% to 30% increase in DVD sales that can be augmented.”