Blockbuster Plans Express Kiosk Expansion
Self-service technology provider
NCR Corporation's acquisition of movie rental kiosk vendor
TNR Entertainment will
enable the expansion of the 50 Blockbuster Express DVD rental machines media entertainment retailer Blockbuster, Inc. currently operates in partnership with NCR.
Blockbuster initially launched the
Blockbuster Express program in Q3 2008. The machines allow customers to rent DVDs, but are designed to also allow digital content downloads and the sale of DVDs and video games. Blockbuster hopes to have thousands of Blockbuster Express kiosks in operation by 2010, providing a non-store platform for its business.
Blockbuster is looking to expand its kiosk business at a time its overall business health is in jeopardy. Earlier this month, Blockbuster stated in
an SEC filing that there is “substantial doubt about our ability to continue as a going concern.” The doubt relates to Blockbuster’s ability to satisify requirements for a $250 million credit facility and to maintain general liquidity.
Blockbuster
recently reported declines in revenues and gross profit for fiscal 2008, although the retailer met projected domestic same-store sales increases of 6.4%. These increases were largely driven by a 36.5% increase in domestic same-store retail comparables, consisting of increased sales of games, game merchandise and consumer electronics. Domestic same-store rental comparables decreased 2.6%.
In another move to expand its non-store retailing platform, Blockbuster recently
partnered with TiVo to make 10,000 movie titles available for direct download to TiVo recording devices. Online DVD rental/video streaming retailer Netflix, who reported
double-digit increases in net income and revenue during fiscal 2008. Netflix is also increasingly focusing on its
direct video streaming service, initially launched in January 2008. Netflix does not provide separate financial figures on its streaming business but recently said streaming is “gaining momentum.”
At the end of fiscal 2008, Blockbuster was operating 7,405 stores worldwide, with 3,878 company-owned and 1,599 franchised stores domestically and 1,928 company-owned stores internationally.
