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Vending Machines Are Coming Up All Over

9 Jun, 2003 By: Holly J. Wagner

Traditional video specialty retailers may be skeptical about the prospects for video vending machines, but businesses outside the retail core are embracing the opportunity to cash in on the most successful consumer product introduction ever: DVD.

Businesses testing video vending machines range from fast-food restaurants to cafes to convenience stores to drugstores -- although rumors that they would soon be on the Washington, D.C., Metro subway line are erroneous. So far.

With new players emerging on the vending machine field what seems like every day, companies are battling for position in what is shaping up as divisions by class of trade.

New player GetAMovie has won a four-store test in Jewel Osco drugstores in the Chicago metro area.

“It's a six-month test. Depending on acceptance, things might go very quickly,” said GetAMovie president and co-founder Michael DeLazzer. “It depends how fast we get to the numbers we projected.”

GetAMovie provides and places its machines, which are manufactured in Europe, itself. Merchants that give up the 58-inch-by-30-inch floorspace to accommodate each 1,500-disc capacity rental machine get a percentage of the revenue the machine generates.

DVDXpress, which uses machines by DVDPlay, has four machines in North Carolina Kangaroo and Smokers Express stores, operated by Sanford, N.C.-based The Pantry convenience store chain, and three in Duane Reade drugstores in the New York City market.

At least one other convenience store chain, Tom Thumb in Florida, is testing the machines. Tom Thumb has put video rental kiosks into 10 of its stores. The company that provides those machines, Movies & Games, also has one at the Oracle corporate offices in California's Silicon Valley.

McDonald's put TikTok DVD Shops in 14 of its restaurants in the Adams-Morgan area of Washington, D.C., for a three-month test. Before its recent change of CEOs, the fast-food giant even went so far as to buy the company that makes TikTok, Automated Distribution Technologies of Exton, Pa. Industry scuttlebutt is that McDonald's is removing most or all of the machines because they were difficult to site within existing store footprints, but spokespersons for McDonald's and TikTok have not returned numerous phone calls seeking comment on the chain's plans.

TikTok's machines did show up on a recent agenda for the Washington Metropolitan Transit Authority (WMTA), but after the Associated Press reported it, board members had the item removed from consideration, WMTA spokeswoman Lisa Farbstein said.

Sherman Oaks, Calif.-based CineMachine is the only pure-play sellthrough-machine company. CineMachines carry 425 discs, 25 titles at a time, and an expander model adds 15 titles and 225 discs. The machines, placed in truck stops, grocery stores, movie theater lobbies and university bookstores around the country, offer discs for between $11.99 and $19.99 each.

“It just seems to be the right price range for the impulse nature of a vending machine,” said CineMachine president Jeff Ringer, adding that because mass merchants use new releases as loss leaders, “We're finding that we're selling many more classics, and we are not as strong in the new releases.”

CineMachines are in bookstores at the University of Houston; University of Colorado, Boulder; and Washington State University; as well as in 10 Cinemark movie theaters in California, Colorado, Ohio, Oregon and Texas.

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