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SD card kiosks in store tests

DIGITAL: Download machines will offer major studio movies day-and-date with DVD

By Jennifer Netherby -- Video Business, 11/9/2009

The kiosks are being tested in Blockbuster and Hollywood Video stores.

NOV. 9 | DIGITAL: Kiosk players NCR Corp. and MOD Systems will begin testing digital movie rental kiosks via downloads to SD cards in six Blockbuster and Hollywood Video stores this week.

Customers of two Dallas-area Blockbusters and four Hollywood Video stores in Seattle and Portland, Ore., will be able to rent new release and catalog movies from Warner Bros., Paramount Pictures and Anchor Bay through the kiosks.

Kiosks will be loaded with 1,000 films at launch, including some of the biggest fourth-quarter DVD releases. MOD expects to offer more than 1,500 films by early next year, and CEO Anthony Bay said the company is in talks with other studios to broaden the available content.

Films are expected to be available day-and-date with their DVD release, meaning that some are likely to be available for digital rental through NCR/MOD kiosks before they are available through cable VOD or digital VOD online. Bay said the goal is to create parity in stores between digital and physical rentals.

Consumers will be able to browse films on the kiosks and within minutes, download a rental to an SD memory card, the same card used in digital cameras. Because there aren’t yet many devices on the market that securely playback video content on SD cards, stores will offer renters MOD-branded set-top devices with secure SD slots that customers can hook up to their TV for playback. Stores are expected to offer SD cards and the set-tops for rent or possibly for free to customers, following a model used by some retailers in DVD’s early days.

Although DVD-renting kiosks have taken off with consumers by offering $1 a night rentals (and incurred the wrath of some studios), digital rentals will be priced higher.

“You’re not going to see $1 downloads,” Bay said.

“This is an evolution of the whole entertainment industry for movies and music and entertainment content,” NCR entertainment VP and general manager Alex Camara said. “We’re working closely with the studios.”

Pricing will vary by store as retailers and kiosk companies test different models, though it is likely to be similar to DVD and Blu-ray rental pricing in stores.

Similar to VOD rentals, consumers will have 30 days to watch the movie once they download it to their SD card. After they begin playing the film, they have 48 hours to watch before it times out and is unplayable.

Kiosk companies and retailers will position the kiosks in different parts of stores to test which location works best.

In the initial Blockbuster and Hollywood Video tests, MOD and NCR will offer digital rentals only, though the machines are capable of offering sell-through downloads as well. MOD and NCR are in talks with other retailers, including sell-through DVD retailers, for other tests.

Camara said NCR views digital content as part of its “growth strategy” and one that will put it in the digital lead among kiosk companies.

“We’re the only kiosk provider with the ability to be able to do this,” he said. “Nobody else has space inside their machines. Nobody has the ability to offer what we’re offering in the next week.”

Camara said DVD kiosks NCR introduced last month are capable of offering digital video content and physical rentals, though none offer digital today.

“Physical media is still in the lead and will be for several years to come, but consumers want the choice of physical, digital or, for many, both,” he said.

The kiosk company has already partnered with Blockbuster for Blockbuster Express DVD kiosks, and Camara said it was a “natural fit” to work with the retailer on this test. NCR is talking to its other retail partners as well.

NCR and Toshiba partnered with MOD last year to deploy kiosks that offer digital content downloadable to SD cards. The companies also invested $35 million in MOD.

Playback of movies on SD cards is limited today, but that’s expected to change in the next year.

In the coming months, Toshiba is expected to introduce devices with secure SD card slots, enabling more customers to easily playback digital content stored on SD cards. Future versions of the kiosks might also allow consumers to move content from SD cards to laptops and portable devices.

MOD, a member of the Digital Entertainment Content Ecosystem, will incorporate whatever standard digital format the group adopts, which would potentially enable customers to access digital movie purchases on other devices in their home.

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