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Amy Patterson of Decatur said she shops at the Publix on Beltline Road nearly every other day and uses the new DVD vending machine because of its convenience.
Daily photo by Jonathan Palmer
Amy Patterson of Decatur said she shops at the Publix on Beltline Road nearly every other day and uses the new DVD vending machine because of its convenience.

Grocery store first in Decatur with machine renting DVDs

By Paul Huggins
phuggins@decaturdaily.com 340-2395

Amy Patterson wanted to rent "The Nativity Story" when it came out Tuesday, but all copies were rented by the time she started her search at about 4:45 p.m.

But stopping to check on its availability cost her only about 30 seconds after she pushed her shopping cart away from the checkout at Publix. The wife with a part-time job simply used the touch screen on a new DVD rental-vending kiosk to see what movies were available.

If a copy of her movie choice had been available, she could have had it in her hands within 2 minutes.

No searching the aisles. No waiting in line. No one asking you to buy rental insurance. And most of all, no extra trip to her favorite video rental store.

"It's very convenient," Patterson said. "And it's only a dollar, so it's very cheap."

She basically summed up the marketing strategy of The New Release company, which installed the DVD rental kiosk at Publix about three weeks ago.

Customers who want convenience, low prices and instant gratification are the niche market New Release and other DVD vendors have begun to reach.

Publix on Beltline Road Southwest is the first store in the city and one of 15 grocery stores in the state to offer the service. Nationwide, New Release will have 1,500 DVD vending kiosks in 30 states by the end of March and 3,000 by the end of 2007.

Redbox, a joint venture by Coinstar and McDonald's, has similar machines in 2,300 locations and expects to have 4,000 sites by the end of June. Even Movie Gallery has entered the vending machine market, with plans to have 200 kiosks in place by the end of 2007.

"We're on the fast track," said Craig Parsons, spokesman for Texas-based New Release. "Bear in mind there were only 165 in 2005."

The goal is to saturate the market so that DVD rental kiosks are in every grocery and convenience store, and possibly in places like college dormitories and apartment complexes, he said.

In a society that has an insatiable appetite for convenience, do DVD vending kiosks spell doom for brick-and-mortar rental store like Movie Gallery and Blockbuster?

Probably not, Parsons said.

New releases

"We can't compete, nor do we claim to compete, in breadth of inventory of titles of a brick-and-mortar store like Blockbuster," he said. "As our name implies, we primarily offer new releases."

And Netflix customers aren't targets because they've shown they don't put a high value on the instant gratification that vending machines offer, he added.

The marketing model is tied to people who shop at grocery stores two or three times a week and want to rent new releases.

The New Release machine at Publix has about 1,000 movies with 200 to 250 different titles. Customers use a touch screen to view available movies in alphabetical order. They can narrow the search with categories such as action/adventure or comedy.

The machines take only credit/debit cards, which also serve as a barrier to children under 18 renting R-rated movies.

If you know the movie you want, it takes about 2 minutes to complete the transaction. You must return movies to the same kiosk and must have your credit card to do so. Returning takes about a minute and 15 seconds.

Its cost is $1 per day. If you don't return the movie after 14 days, you're charged $35 and the movie is yours to keep.

"From my experience, it will grow quickly," said Sam McMullen, Publix manager, noting the grocery store has no responsibility for maintenance and service.

New Release services the machine once a week with new movies. The machines communicate with headquarters in Texas via a cellular antenna, so the store doesn't even have to produce a phone line.

New Release pays a monthly fee for the floor space and also pays the store a percentage of monthly sales.

Parsons said refinements in technology have allowed New Release to decrease the size of the kiosks to about the same size as a soda machine while also increasing the number of DVDs in can hold.

But while technological advancements have helped make the DVD vending industry viable, they also pose the biggest threats to the machines' long-term future, he said.

The primary concern is downloading movies to home computers or memory cards, Parsons said, but that technology is farther away than people think, at least for most Americans.

"And in our mind, we have a very specific customer who has instant gratification in mind and isn't an early adopter of technology necessarily," he said.

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