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NCR, Blockbuster’s kiosk-manufacuring partner, has announced the expansion of their Blockbuster Express kiosks into Connecticut and Massachusetts in September. According to them, they will have their blue kiosks in all 57 “Big Y” grocery stories by the end of the week (Sept 3).

In addition to the Big Y expansion, NCR says there will be 500 of their kiosks in operation by the end of the month, as they rebrand some of their recently purchased The New Release kiosks in Publix stores throughout the Southeast.

This expansion comes at a time when there is a major fight brewing between studios and kiosk operators. However, Blockbuster CEO Jim Keyes supports the efforts of the studios in restricting kiosk rentals to 28 days after release, because it will help his Blockbuster retail locations.

I call foul on Mr. Keyes, who clearly has an agenda against Redbox and other kiosk operators. It is likely him and his lobby that has “suggested” and supported the studios in this recent effort to keep kiosks from competing with his brick-and-mortar Blockbuster business.

While this is all well and good, I think Mr. Keyes – trying to have one foot in two different camps – may get ripped apart in the process. Either that, or he will succeed in keeping his now declining company in the game a little longer. Which will it be?

[via VideoBusiness]

57 Responses to “Blockbuster Express Seeing Major Expansion in September”

  1. Member [Join Now]
    richmoral

    I heard that the new CEO for Blockbuster is a really young guy and that he hasn’t even been with Blockbuster for that long of a time.

    • Visitor [Join Now]
      Joey [visitor]
      I work for VBG. To find out why this is important, click here.

      Jim Keys is the figurhead who turned around 7-11 stores in the 90’s when they were in financial trouble. He actually did fairly well with it.

  2. Member [Join Now]
    Shemp Howard [shemp-howard]

    Good news!
    More players benefit consumers. Hopefully, those who don’t have kiosks, or a choice of same within a commuting distance, will now have another option :).

  3. Visitor [Join Now]
    Joey [visitor]
    I work for VBG. To find out why this is important, click here.

    Jim Keys and the studios are right. Kiosk have a place in this market and it would be 30 days after the initial release.

    • Visitor [Join Now]
      Ginger [visitor]

      It’s completely ridiculous to say that it’s fine to rent new releases on the day of release only if they’re 3, 4 or 5 dollars apiece from a rental store, but not if they’re $1 from a kiosk. If kiosks are hurting rental stores, then rental stores need to remember that competition is a part of business and that the solution is to find a way to compete. The idea that production companies and video rental stores would rather put a boot on kiosks, instead of finding a way to actually compete, is asinine and only makes them look bad.

      • Visitor [Join Now]
        Sony? [visitor]
        I work with VBG. To find out why this is important, click here.

        According to reports each machine only nets $100/month.

        Do you want to run a video store and net $100/month.

        Now that would be asinine!!!

        • Visitor [Join Now]
          Ginger [visitor]

          It has nothing to do with what their profits are. It’s the fact that they’re obviously popular enough to make video stores and production companies feel their profits are threatened. The fact remains, they need to find a way to actually compete, not just try to throw a blanket over them and hope they go away.

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            They are not threatened. They have a gun to their head, playing russian roulette with 5 bullets in a 6 bullet gun. They are dead in the water.

            I’d like to know anyone who can come up with a legit way that these stores can compete with a box that getting by with $100/month.

            I’d be really scared making $100/month. I wouldn’t want to own 25 of these machines so I can make an average living knowing that I only have a $100 cushion.

            How do you compete with that?

  4. Visitor [Join Now]
    Question [visitor]

    How much for a rental in Blockbusters’ kiosks?

  5. Visitor [Join Now]
    Carson [visitor]

    I guess I don’t mind waiting 28 days, if I didn’t see it in the theatre, I figure I’ll have to wait 6 months or so, what’s another 28 days? I guess there has to be some downside to paying less. People waiting for OnDemand releases have to wait longer than the DVD release, so I guess its not such a huge deal. Price is the most important thing anyway, right?

    • Visitor [Join Now]
      Joey [visitor]
      I work for VBG. To find out why this is important, click here.

      I think if red box did do windows everybody would be happy. The people who wanted to get the movies for a buck would be satiasfied and the traditional rental and sell thru would be satisfied by the people wo didn’t want to wait the extra month.

      • Visitor [Join Now]
        Sean [visitor]

        Wrong. I would not be happy. One dollar per night is actually more than traditional stores charge. The way I see it, they are forcing me to rent something for six more days than I need it for, just so they can get a few more bucks out of me. That’s the way I look at this issue. If they want to compete, they should allow customers an option to rent by the night. They would get a buck that night, and every night after that as a different customer would rent it. By the time a week has passed, they have made MORE money. That way they could also save money by purchasing less copies of a particular movie seeing as how they will be getting back on shelves faster. It’s the only thing that’s fair. It only takes me, on average, a couple hours to watch a movie, why the hell do I need it for seven days?!? Either way, there are options…there ARE ways for these stores to try and compete. Instead they not only want to refuse to even attempt to innovate and keep up with the market, they also want to stifle any competition that does deep up with the market. All so they can sit back and lazily rake in profits. Well newsflash, that’s not how it works.

        • Visitor [Join Now]
          Sony? [visitor]
          I work with VBG. To find out why this is important, click here.

          B&M cannot get by on “Income” of $540/month when “Profit” is not possible.

          Not every Video Store charges $5 either.

          I’ve seen Independent stores at $2/night. $2.50 for 2 nights and they are now gone.

          You cannot compete. The drastic cut RB put in perceived value is the trick that made them look so attractive.

          • Visitor [Join Now]
            Sean [visitor]

            You’re assuming one store will have the exact same income as one single kiosk, which is absurd. Stores have more copies of way more movies, for one thing. There will still be a lot of people renting for the week, also. Also, the money they make on games, food and other things. Plus an unknown amount of other differences. Basically, your whole argument is based on them making the same as one kiosk, which I think it’s safe to say is not possible. I mentioned games, and you may think redbox will be competing on that level as well. At two dollars a night, I think it’s a mistake for redbox to even try competing in that market. A game IS something you need for a week or more. At two dollars a night, it will cost fourteen bucks to rent a game for a week. They will not get my business there.

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            You are correct. Over simplified it.

            However, If BB went to $1/day at the B&M they would Gross Far less. They would have to order more product, employ more people and still pay all their expenses.

            It’s far too easy to see that BB or Mom and Pops cannot make it at $1/per rental.

          • Visitor [Join Now]
            Joey [visitor]
            I work for VBG. To find out why this is important, click here.

            don’t forget these great income generators —“DVD Rentals are Now Free if You Buy Some Toilet Paper, Detergent and Toothpaste

          • Visitor [Join Now]
            Sean [visitor]

            “If BB went to $1/day at the B&M they would Gross Far less.”

            How so? As it is they only make around 71 cents a day (and that’s if you DO NOT take advantage of no late fees). With the money they would save putting less copies of movies on shelves (because they would be returned faster), and the new business they would generate, who’s to say they would not gross more money? I for one would ditch redbox and go back to regular stores if they offered the fair option of by night rentals, and I bet a lot of others would as well.

          • Visitor [Join Now]
            Sony? [visitor]

            You are a little too hung up on the 71 cent average. Most people are not going to keep the movie that long anyway.

            B&M have rent, cam charges and taxes that equal $4000 to $10,000 month. Not to mention all the other fees.

            For the $1 program that’s 133 movies to 333 movies a day they will have to rent to take care of those fees. If someone rents for 1 day they are going to keep it an average of 2 days for a net of $2. You will have to keep inventory up or rent fewer. You are going to have to rent more than 133 to 333 to accomplish this.

            Not that the $5 program is any good, but they only have to rent 27 to 67 movies a day to take care of those fees. Once again most people are not going to keep movies for 5 days and they will have smaller inventory.

            Now you add to the fact that RB gives away the farm multiple times a week with freebies and B&M doesn’t have a chance.

          • Visitor [Join Now]
            Sony? [visitor]

            With the amount of freebies It wouldn’t surprise me that the average per day cost of a rental is under $0.71 at Redbox. Especially on free code days.

            The $0.71 avg at BB is assuming everyone keeps it 5 days.

  6. Member [Join Now]
    Mark [rb123456789]

    The $100 a month figure per kiosk is wrong. The figures I have read are around $540 a month. Redbox has stated they had $58M in income (on revenues of $344M) in the first six months of this year. For a bit fewer than 18,000 kiosks. Do the math.

    http://www.homemediamagazine.com/redbox/redbox-profit-grows-coinstar-execs-eye-more-studio-deals-16627

    So since the $100 a month number is wrong, that suggests maybe you should not believe everything the anti-Redbox crowd here says…

    or maybe even you should not believe anything they say…

    • Visitor [Join Now]
      Sony? [visitor]
      I work with VBG. To find out why this is important, click here.

      I think Michael could clear this up.

      $540 is news to me.

      BTW – I don’t think you would like to only net $540/month per store.

    • Visitor [Join Now]
      Sony? [visitor]
      I work with VBG. To find out why this is important, click here.

      I didn’t see anything about a $540/per box per month for “NET” income?

    • Visitor [Join Now]
      Sony? [visitor]
      I work with VBG. To find out why this is important, click here.

      The website clears nothing for me.

      You will need to elaborate.

      I’m looking where it states they “NET” $540 per machine per month.

      • Visitor [Join Now]
        Chris [visitor]

        Keep in mind that these machines make whatever they make with only 3 new releases and some old titles most weeks. They’re also carrying some pretty lousy new titles each week as well and they are even late getting some Universal titles already.
        Multiply how many DVD titles Blockbuster is carrying at any given time and that should net you a bit more than $540/month even at $1/rental.

        On the subject of finding a way to compete, Blockbuster is already doing it with better selection and tie-ins with their mail-order monthly fee service. They wouldn’t be the first business to market themselves as a premium brand and drop the pandering to cheapskates. The point being, that a business succeeds by employing creative people smart enough to succeed in a competitive environment, not people who seek anti-competitive advantages.

      • Visitor [Join Now]
        Jack [visitor]

        This is a better link:
        http://www.videobusiness.com/article/CA6674780.html

        2nd Qtr Operating income $31M divided by
        3 (months) in a Qtr divided by
        17,900 #of Redbox kiosks
        = about $577 per month operating income* per kiosk

        *subtract interest and taxes to arrive at net income

        Of course, this is all based on one qtr’s performance

        • Visitor [Join Now]
          Sony? [visitor]
          I work with VBG. To find out why this is important, click here.

          *Taxes and interest could be well over $500 per month per machine.

          I’ll dissect it a different way. Net Income is the main number to look for.

          Based on article submitted by Jack. This Quote, “Overall, Coinstar’s second-quarter net income doubled to $6.96 million”

          A terrible way to do it, but I’ll assume Coinstar Broke even on all other aspects of their business and assume the 6.96 million was all the result of Redbox.

          That’s a NET Income of around $130 per machine.

          Anyway, neither way is a good way to come up with a number.

          However, I think the number is far closer to the $100 per machine than $500+.

          My guess, since net income doubled the past quarter, is that RB was working on a Net Lose up until recently. If Coinstar’s other ventures were working at a positive net income, it may even be a safe bet to believe that RB is still working on a Net Loss.

    • Visitor [Join Now]
      Joey [visitor]
      I work for VBG. To find out why this is important, click here.

      Ok even if it were a $100 a week that’s what $15 dollars a day. that’s not even enough to pay 1 employe for 2 hrs.

  7. Visitor [Join Now]
    Jim [visitor]

    Redbox has stated they had $58M in income (on revenues of $344M) in the first six months of this year. For a bit fewer than 18,000 kiosks. Do the math.

    Are those strictly Redbox #’s or are they for all of COINSTAR’s operations?
    Just Curious.

    • Administrator
      Michael [administrator]

      Those are strictly numbers for Redbox.

      There are a few things to remember here, though. First, we have to consider the differences between revenue, income, and profit.

      Coinstar does not disclose “profit” just for its Redbox business, but their total profit for Q2 was $7 million, up from $2.8 million from the Q2 in 2008. We can likely assume that most of Coinstar’s profit now comes from Redbox, probably around 70% or so. You can go back and look at more historical numbers, but that is likely close. If we use that number, that gives Redbox an average profit of $272 per kiosk for Q2, which is about $91 per month.

      Next, we need to consider that fact that it takes awhile for Redbox to get any net profit from a new kiosk installation. I have heard the figure of about 2 years, I think, on previous earnings calls. So, for the kiosks that have already paid for themselves, the net profit is much higher.

      In any case, it does appear that the $537 per month per kiosk of “income” is a valid figure, but that does not equal profit. The rest is speculation.

    • Visitor [Join Now]
      Sony? [visitor]
      I work with VBG. To find out why this is important, click here.

      Income?

      Does it state “NET” income on this report?

      • Visitor [Join Now]
        Sony? [visitor]
        I work with VBG. To find out why this is important, click here.

        Now we can get back to my question.

        How do you compete with a machine that only draws a “Profit” of less than $537.04/per month?

        • Administrator
          Michael [administrator]

          If your question is “Can a brick-and-mortar DVD rental outfit compete with Redbox on price alone?”, the answer is clearly “No.” It is simply time for these companies to adapt to the changing marketplace.

          Why do you think Blockbuster started a mail-order business? To compete with Netflix.

          Why are they starting a kiosk business? To compete with Redbox.

          Why are they starting to sell more things like games, game consoles, food, etc…? To add revenue in-store.

          The reality is, brick-and-mortar movie shops are dying. That is just the reality, and they will need to think of innovative new ways to compete. It happened to the music industry, and it is now happening to the movie industry. If it wasn’t Redbox, it would be something else.

          Do I blame the studios or Blockbuster for trying to protect their revenue streams? Absolutely not. But that doesn’t mean they can afford to ignore the realities of the changing environment.

          In today’s increasingly automated world, it is innovate or die.

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            Thank you Michael.

            This is what I’ve been talking about when people are upset that Brick and Mortar should be innovative enough to compete with $1 rentals.

            The complaints about $2 to $5 rentals with these places have been laughable when their obviously no way to compete.

            The big problem lies when a company has to raise it’s prices. It appears to me that RB will have to do that eventually.

            What will the public do then?

            But I’d love for someone to give me a legit way that a Mom and Pop or a Blockbuster could compete with a product that has been valued dramatically lower than what we saw just 3 years ago.

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            Let’s hope that the Movie industry does not follow the Music industry.

            That would be a huge disaster.

  8. Visitor [Join Now]
    jim [visitor]

    You suck it up and remember that you went into business and took a risk. If you fail because someone else is smarter than you, then so be it. Quit you whining! By some kiosks if you want to be involved and make more money. DVDNow is the place to get your kiosk from. I have been doing lots of research and thats the way to go.

    • Visitor [Join Now]
      Sony? [visitor]
      I work with VBG. To find out why this is important, click here.

      Who’s whining?

      I’m not chasing my tail for less than $500/machine.

    • Visitor [Join Now]
      Sony? [visitor]
      I work with VBG. To find out why this is important, click here.

      Although I could see as an Independent Kiosk owner you have to love all the Studios making a mess of things.

      You handle all your machines on a one on one basis and RB has an infrastructure nightmare on it’s hands.

    • Visitor [Join Now]
      slidecage [visitor]

      i would buy one but the COST is insane… if i did buy one though i wold only stock video games since i know of a few places i can get ps2, ds and psp games as low as 1.00 each to keep and xbox 360 and wii and ps3 ames for 6

  9. Member [Join Now]
    clownphart

    Crappy movies is hurting everybody.

  10. Visitor [Join Now]
    Crystal Morton [visitor]

    I can see both sides of this argument. How about a compromise? Say, a week instead of 30 days?

  11. Visitor [Join Now]
    Richard [visitor]

    Who cried for the mom-and-pop video stores when Blockbuster, Hollywood Video, et al came in and drove the mom-and-pop video stores out of business? One of the major differences is that BB et al probably have more politicians in their corporate pockets than mom-and-pop stores.

  12. Member [Join Now]
    eledon

    What ever happened to the Free Monday movie codes?

  13. Visitor [Join Now]
    ChadCronin [visitor]

    I don’t feel the love for Blockbuster trying to make me wait longer to get what I want. There isn’t too much I am clamoring to rent anyways, so I’ll just wait. Like most people I don’t even notice release dates til Redbox puts them on their wall of what’s coming out. If I really want a title I buy it anyways. I still don’t get why the industry is so afraid of Redbox. I spend more money and sometimes even keep the movie an extra day. When I did go to Blockbuster I would spend the $21.99 for 1 out and rent 60 movies that month going there twice a day. Then cancel and wait 6 or more months til they got newer titles to rent another 60. If the industry wants to make money they need to figure out how to work their business model and not try to punish a few companies for their bad decisions/movies.

  14. Member [Join Now]
    MrClean [mrclean]

    Blockbuster charges way to much for movies. After being fed up with bb constantly jacking up prices and having no other place around to choose from. I have been downloading movies for a few years. Since I have become aware of Redbox I have paid for 5-10 movies a month and no longer download them. At $1 a movie the cost outweighs the time, effort, and lets be honest the legality of it.

  15. Visitor [Join Now]
    JJJ [visitor]

    Well, there it is. Anti-competition, anti-trust and there must be some sort collusion/connection with the big studios.

    Follow the money trail.

    “Blockbuster CEO Jim Keyes supports the efforts of the studios in restricting kiosk rentals to 28 days after release, because it will help his Blockbuster retail locations.”

  16. Member [Join Now]
    Mark [rb123456789]

    So the guy wants his own company to make money, and somehow that’s illegal or wrong? Yeah, sure.

    If the suppliers, e.g. Universal and Warner and Fox, all get together and decide to cut out access to Redbox and favor Blockbuster, that might be collusion or anti-competitive. But if their customer, with no control of the policy, simply agrees with it, that’s nothing except good business on Blockbuster’s part. (Which will probably be the first and last time I ever say that about Blockbuster).

    If the studios and BB were so chummy, you’d have thought they would have made money at least one of the last four (at least) years. Which they didn’t.

  17. Member [Join Now]
    offthegrid

    I signed up for this just to check it out. They are in Tedeschi’s around here already and I imagine more locations soon.

    The bad news is you cannot reserve a video from what I can tell as you can with RedBox which is a HUGE difference and the return time is 7pm where RedBox gives an extra 2 hours till 9 which for me makes a big difference.