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Walgreens to Bow DVD-Burning Kiosks

2 Nov, 2007 By: Erik Gruenwedel

Walgreens is planning a major DVD sales offensive designed not to impact a single square inch of lucrative shelf space.

The nation's largest drugstore chain, with more than 6,000 locations, next year plans to unveil kiosks that will allow consumers to burn their favorite Hollywood movies onto special blank discs.

The DVD Copy Control Association in September approved for the first time the ability for commercial vendors and consumers to create CSS copy-protected DVDs for playback on standard DVD players.

Most major studio movie DVDs are CSS-protected.

Walgreens currently sells a smattering of new release movie DVDs in select markets. It subleases Redbox DVD rental kiosks in stores in Atlanta, Phoenix and Columbus, Ohio, among other areas.

A Walgreens spokesperson said the Deerfield, Ill.-based company is working with Sonic Solutions, YesVideo and Polar Frog Digital, among others, to make the kiosks a reality.

“This is an exciting development for us,” said spokesperson Tiffani Bruce. “This will allow us to have a virtual inventory.”

Sonic recently updated its Qflix DVD-burning software based on the DVD CCA changes. Polar Frog, which cut its teeth marketing DVD-burning kiosks featuring adult entertainment, is reportedly responsible for securing content and assuaging studio concerns about existing retail partners.

Parks Associates has reported that on-demand movie DVD revenue is expected to reach $1.3 billion by 2011.

Parks Associates analyst Kurt Scherf told Reuters he expects the studios will initially offer mostly catalog titles and not new releases to the kiosks.

Bruce said the kiosks will allow Walgreens to offer titles appealing to its diverse customer base. She said consumers will be able to print out box art at Walgreens' digital photo lab.

The chain hopes to bow the first kiosk in the next two months.

“We can package the movie the same way we would a standard DVD,” she said. “And we can have an inventory that appeals to everybody.”

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