Canadians are expected to soon be dropping their dollars into vending kiosks sporting digital screens in their efforts to rent movies and games – which could be bad news for those small mom-and-pop movie rental shops that still remain.
As for the big players, it could be good or bad, depending on if and how they welcome the kiosks in their retail outlets.
For supermarkets who already try to be one-stop marketers, it would be another offering for their clients. And it could be a bonanza for small convenience stores who put machines into their outlets for the use of customers dropping in for bread, milk or lottery tickets.
Toronto-based Signifi Solutions, which originally offered ‘Movie Spot’ machines for serve-yourself digital photos, music and movies, is completely changing its focus to concentrate on the software development and manufacture of self-serve kiosks offering DVDs of movies and games. It plans to move across Canada big time, putting its 7’ tall x 3’ wide machines branded ‘Playground’ in outlets of all sizes, in association with independent company Spot Ventures.
The machines, each containing 1,400 movie and game discs, will have a main digital screen for entertainment and advertising (expected to be largely for movie trailers, games, snacks sold at the point-of-purchase) and a text screen. The machines (a store could have two that share inventory) will also allow customers to reserve to rent via the Web.
With busy Canadians demanding greater convenience, value and freedom of choice, traditional retailers are being forced to embrace technology and evolve their service offerings – and that includes those in the movie distribution business.
Some numbers: According to Adams Media Research, movie rental kiosks throughout the United States alone will account for $830 million in revenue this year. This represents a staggering 70% increase from 2008. It also expects kiosk rental revenue to increase 15% annually through 2013. Traditional movie rental stores now only represent 45% of movie rental revenue, down from 71% in 2007. Mail-order rentals account for 36% and movie rental kiosks now have 19% of the rental market and growing. Annual U.S. DVD rental revenue from kiosks is expected to grow to more than $1 billion by 2011.
The Canadian movie rental industry is currently valued at close to $2 billion, with projected growth of 4.4% by 2011. Signifi plans to capture the major share of the Canadian marketplace with the launch of the new network of self-serve movie and game rental kiosks. In about a year or so, new generation machines from Signifi will also have the ability to download and burn discs on demand.
We talked to Shamira Jaffer, founder ( in Jan./05) and president of Signify, about the digital self-serve industry which has taken off strongly across the U.S. and where companies such as Blockbuster have confirmed adoption of movie vending kiosks.
Among the major players in the U.S. are: Redbox with a national network of over 18,000 movie rental kiosks in the U.S including at select McDonald’s restaurants, grocery and convenience stores, Walgreens and Walmart; NCR Entertainment which now owns and operates the former TNR network of 2,500 units and now using the brandname Blockbuster Express; and DVD Play operates 1,500 units, the majority of which can be found throughout the Safeway supermarket chain.
The movie rental industry is expected to continue to grow. In 2008, 100 million DVD households in the U.S. made almost 2.6 billion DVD and Blu-ray rental transactions (including kiosks) between them, according to Screen Digest.
An analysis of the Canadian entertainment and media industry by PricewaterhouseCoopers said that:
- Spending on entertainment and media in Canada was expected to increase from $36 billion in 2006 to $47 billion in 2011;
- Home Video sales would increase from $3.3 billion in 2006 to $4 billion in 2011;
- In-store rental growth would grow from $1.5 billion to $1.6 billion.
- Online rental subscriptions would rise from only $12 million in 2006 to $285 million in 2011.
“The Canadian marketplace is ripe with opportunity,” says Jaffer. “We are currently testing our machines in some Sobeys and Rabba supermarkets and Mac’s convenience stores in Toronto. The digital screens on the machines help drive business.”
Industry rumour is that one video rental chain in Canada is already considering shrinking the size of its stores and putting in Playground kiosks.
Signifi’s plans are to expand across Toronto in Dec./09, and then to roll out across Canada over 2010. Retailers who put in the machines through Spot Ventures get a percentage of the revenues from the rentals.