Answers in Progress

In my last post I listed out a lot of my initial questions that came to mind when I first started looking into the DVD Rental Kiosk industry....

Q: Who maintains the stock?
A: ME - I was pretty sure I would get this answer, but I wanted to be on the safe side and ask. I would be in charge of purchasing the DVDs, and placing them in the machine. New releases are set to hit the street on Tuesdays, so I could go out every Tuesday and load the new movies, or I could put them out sometime sooner and lock them down.

Q: Where do I get the movies?
A: Anywhere I want, but Gordon suggest I check out VPD. DVDNow has a strategic Alliance with Video Production Distributors. VPD is a big company that supplies a large part of the market with DVD's. Their deal with DVDNow is 6% over cost, and a buy back program for any DVD's that do not get sold from the machine.

Q: How long does it take to stock the machines?
A: 5 to 10 minutes

Q: Are there any sample reports I can see?
A: That will come with back end software demo if you become an accepted distributor.

Q: What is the potential income?
A: DVDNow is prohibited by law to make income claims, but after you are accepted as a distributor they can put you in contact with some other distributors who have much more liberty to discuss that type of information. (Here is a link to a blog written by a guy who already has a few machines up and running)

Q: How do I get customer email addresses, so I can do promotions?
A: This cannot be gotten from the machine, but a customer can visit your website to get a receipt, and they are working on a way to offer email subscription for promotional contact.

More to come...

Ok... I have a ton of questions

After I found DVDNow, I was pretty sure this was the company I wanted to go with. I decided to give the Sales Department a call, and see if finally one of these companies would answer my phone call without me having to call the Customer Service number. A nice lady answered my call, and sent me to the guy in charge of my region of the country. His name was Gordon, and sounded less like a salesman, and more like a guy who new everything about, and loved the industry. He reminded me of an Uncle who knew everything about everything, and I really liked him.

We talked for about 15 minutes, and he told me why the industry was poised to be huge, and why DVDNow was a great choice. After our call, I was even more sure that this was the way to go, so I sat down and wrote down some questions, so I could call Gordon back and pick his brain.

Who Maintains the Stock?

Where does the Stock come from?

Are there example reports that I can see?

What is the potential for Income?

How long to stock and maintain the machine?

How much time at the actual machine?

How do I get customer email addresses, so I can do promotions?

Best route for financing?

Monthly cost for backend software?

Can my movie be returned to another machine if I own more than one?

Maintenance?

Indoor or Indoor/Outdoor?

How much to get up and running?

What if I don't want to offer R Rated Movies?

How do you know if the returned movie case has a movie in it?

Who provides the Box art for the side panels?

Over the next few posts I will start to answer these questions with as much detail as I can. Some of these questions generated more questions, which I will answer as I come down the list.

Plan B Continued.... DVDNow - I think we have a winner

Here is the break down so far... I hit a brick wall with Redbox, DVDPlay, and DVDXpress in my effort to become "the next DVD Rental Kiosk Millionaire". I also learned along the way that I would prefer my machine to dispense the New Release Movies in their original cases, to help with the Sell-Through Process (check previous posts for explanation).

I was not ready to give up, so I continued my Google Search for any company that would at least consider the option of selling me a DVD Rental Kiosk. Then I came across a company called DVDNow. Honestly, I was not to optimistic that this company would be any different than the rest, but my interest was peaked when I saw an "Opportunity" button. I clicked the button and read through 3 or 4 paragraphs about why the DVD Kiosk industry was up and coming, and why it is going to generate billions of dollars, all things I had read before. Then I read....

"The DVDNow automated rental kiosk enables entrepreneurs to capitalize on the $20 billion DVD industry by allowing them to participate in this soon to explode market. With our program, independent operators are able to establish a network of state of the art DVD rental terminals in locations such as grocery and convenience stores, fast food restaurants and large apartment/condo complexes."

Hot Dog!!! I think we have a winner!! I thought to myself "Please God let this be a legitimate company and not some fly by night scam" I continued over to the product page to learn about their machine. It did not hold as many discs as some of the competitors, mainly because it dispensed the movies in their ORIGINAL CASES. YESSSS!!!!!!!! As you can tell by my over use of exclamation points, I was getting a little over excited at the prospect of finally, possibly, finding what I had been searching for. I quickly read through the rest of the website and Frequently Asked Questions. Nothing jumped out at me as a red flag, so I circled DVDNow on my notepad, and continued my search. I wanted to continue my search to see if I could come up with any other companies that could compete with DVDNow.

Related Videos....

Plan B Continued... DVDXpress

If you read my previous posts, then you know that "Sell-Through" is important for a DVD Kiosk, and that selling a product in the original packaging is key for increasing sell-through of your DVD inventory. You also know that Redbox and DVDPlay, aside from not making an offering for individual operators, sell their DVDs in generic slimline cases to save space in the machines.

When DVDXpress popped up on my Google search, I thought I might have been on to something. According to the little demo on their webpage, it looked like they dispensed their DVDs in the original case.

DVDXpress also had an interesting twist that I had not seen anywhere else. For a monthly subscription of 12.99 you could rent as many DVDs as you wanted from their machines on a 1 at a time basis. This I thought was a pretty clever way to develop loyalty, and a residual income. You could also rent DVDs at the regular price on a per night basis like Redbox and DVDPlay offered as well.

By now, you know the drill. I looked all over the webpage and did not find owner/operator information. I called the Sales Department but go a voice mail message. I hung up and call Customer Support so I could get a live person. Hooray! I found a live person, but they let me know that they do not offer the option for an individual to purchase and operate their machines.

So that was strike 3. Thankfully this is not baseball, and 3 strikes does not mean you are out....

Sell-Through? Sounds Important... What is it?

A few posts ago, I blogged about my first redbox experience. One thing that caught my eye then, that I have not yet mentioned, was the "keeper" movies for $7. 7 bucks is a pretty good price for a reasonably new release. I figured out pretty quickly that the very innovative DVD kiosk industry had built in a way to get rid of old inventory, and make a few extra bucks. They could sell off the New Releases that started to rent less frequently, and add copies of the "Newer" New Releases to the machine. Brilliant!

I had this whole thought process before I actually rented my first movie, but when my movie came out of the slot, it was in a little slimline redbox case. I thought to myself, "who would want to buy a movie and keep it in this generic little case". For me, and I think for the majority of DVD purchasers, one of the coolest parts of owning the DVD is having it in the orginal box sitting on the shelf. It just looks WAY cool to have a whole bunch of movies on the shelf. Maybe I am the only one that feels this way, but I have a hunch that I am not in the minority on this one.

This part of the redbox experienced did not thrill me. If I was going to actually purchase this movie to keep, I would want to have the original box. So when I found out that I could not own a redbox machine , I was really hoping that the alternative machines I found would rent/sell in the original DVD Case. In my last post I wrote about DVDPlay, another company that would not sell machines to individual operators, who also dispensed their rentals in little plastic cases.

I knew to have the best chance of recouping the expense of the DVD inventory I was going to have to find a machine that would sell in the original case. With that in mind, I found DVDXpress, and thought I might finally be on the right track...

Related Video...

Just to show how people REALLY take their DVD libraries seriously :)

Time for Plan B... DVDPlay

Well, Plan A was to buy a redbox, fill it up with new releases every week, sell the older ones, and keep one of every new movie that I wanted for my own personal DVD library. Plan A was a REALLY REALLY great plan!! The only problem was that it was not based on any form of reality, but rather wishful thinking :)

Plan B was going to have to include a little more due diligence. I set off to Google everything thing I could imagine relating to DVD Vending Machines. For starters, what in the world are these things called, DVD Vending Machines, DVD Machines, or maybe DVDs in a box? Turns out they are called DVD Kiosks. Now that I knew what to call them, I needed to find out what other brands of DVD Kiosks were available. There are actually quite a few.

My search turned up a lot of information about redbox, which we already know is not an option. Next I found a company called DVDPlay. They had a nice looking website, and a pretty good looking machine. The machine actually looked a little bit like a redbox. I was pleased to see that there were nice attractive alternatives. I continued to search the website for operator information, but was not able to find any, and subsequent Google searches came up empty. I gave DVDPlay a call, and was sent to voicemail when I selected the option for the Sales Department. Instead of leaving a message, and hoping someone would call me back, I hung up and dialed the number again, this time selecting the customer service option. I figured if anyone was going to be manning a phone it would be customer service. If they didn't have a customer service department that would answer the phone, I was pretty sure I did not want to look into that company further anyway. CS did answer, and a nice person there informed me that they did not offer the option for an individual operator to purchase a machine from them. She did not rule the option out for the future, but knew of no plans for now.

So a second red machine, and a second dead end. At least I now knew that redbox was not the only show in town, so I marked DVDPlay off my list and moved on....

Related Videos...

We have 3 videos of various quality on today's post

Crappy DVDPlay music video - It is hard to look away (you have been warned)

Informative

DVDPlay VS. Puppies - Who do you think will win? (Apparently recorded by Ray Romano)

Neat... Where Can I Get One?

Tami and I enjoyed our first "DVD Machine" experience. We took "P.S. I Love You" back the next day, and used our other free code. I don't remember what movie we rented. Over the next few weeks, we rented a few movies, and RedBox got a few extra dollars from us when we forgot to return a couple for a few days. Even then the price was cheaper then renting from a movie store.

Now I am really interested in the opportunity to purchase a redbox machine, or franchise, or whatever method they use. I figured, hey, I like movies, and this is a really cutting edge concept. I hopped online and googled redbox. I went to their page, and search all over to find the click here to buy a redbox button. I never found one. I did find a contact us section, and a click here if you want a redbox in your store area. Since that was the best I could find, I sent them an email. That was about 2 months ago, and I never heard back.

I continued my search but had little success in finding out how to buy a redbox. This was because YOU CAN'T (not yelling at you... just showing some emotion). Turns out individual cannot own a redbox, and I was pretty bummed.

Redbox Automated Retail LLC was initially funded by McDonald's Ventures, LLC, a wholly owned subsidiary of McDonald’s Corp., which still owns 47 percent of the company with another 47 percent of redbox owned by Coinstar. Redbox Automated Retail operates independently from its headquarters in Oakbrook Terrace, Illinois, managed by a four-person board of directors — two positions appointed by Coinstar and two appointed by McDonald's Ventures (Thank you Wikipedia).

So it looked like my quest to become the next DVD Kiosk Millionaire had ended before it ever really started. Or had it........?

Related Video...
A redbox machine crashing, just like my hopes of owning one :( Actually it was just restarting itself at around 1am as it is supposed to.

Freebie!! - I suppose I will give it a whirl

My oldest son Allen has a friend whose mother is the Manger at one of the previously mention McDonald's. She had some free RedBox movie rental codes, and decided to give our family a few of them. I stuck them in my wallet, and carried them around for about a month.

In May, around my 9 year anniversary, my wife and I went out on a date. We had a great time. My wife is a photographer, and very good one at that (Simpson Studios). She did the wedding portraits for a friend at a great discount a while back, and the friend gave here a gift certificate to a local Salon/Spa for a couple's massage. Neither of us had ever had a massage, so we put off using that gift for quite a while. Well on this anniversary date, we decided we would cash in on all these free gifts we had been holding on to for so long.

Tami and I got all the kids settled away with various friend for sleep overs, the others off to Grandma's, and headed off on our wonderful and amazingly cheap anniversary date. We started off the night with a glorious, and sometimes painful couple's massage. It felt great, but if you have never done this before, be prepared for some soreness the next day. They did warn me about that and told me to drink a lot of water. It was painful at times, but boy was it worth it. We decided to have a nice romantic dinner at a not so romantic place, Zaxby's. Actually it was really nice. We were the only ones in the restaurant for most of the meal, and we just sat there and talked for a couple of hours. It is a rare thing for a couple with four children to be able to simply sit and enjoy each others company without being pulled away by "thuds" in the other room, or cries for justice from a child who was wronged by a sibling. Plus they had Cherry Coke and good ice, Tami's favorite.

We topped the night off with a trip to McDonald's down the road for dessert and a movie. We pulled up to the RedBox, and hopped out of the van. This was the first time I had ever really looked at the thing up close. We looked over the DVD box art on the big movie board, in an effort to make our selection, while the couple in front of us finished up their transaction. We made pretty short work of our choice, "27 Dresses". Yes I do actually like chick flicks, a nice bonus for my wife. When it was our turn, we pushed a few images on the touch screen, and finally figured out how to push them in the right order, but were a little bummed to see that our selection was not available. We had not considered that this was a possibility, so we quickly went through the list of available movies and finally settled on "P.S. I love you". We scanned our Credit Card, entered our email address, and a few moments later the machine whirred and made some funny noises, and out came a little square case with our movie in it. All in all a pretty painless experience, and it is hard to beat the price of $1 a night.

FREE MOVIE RENTAL ALERT!!!!

Watch the video below, and visit Inside Redbox. OK, I know, he is promoting my competition, but he is showing you how to get a bunch of free movie, I just had to pass that along. Don't forget to return your movies, because your free movie is just for the first day. Even if you don't return it for a while, it is just a buck a day. Enjoy the freebies!!!!

Related Video...

Big RedBox - What is that?

A couple of months ago, I was driving by one of my local McDonald's, and there was something new out on the sidewalk beside the building. There was a big RedBox with a canopy, and what appeared to be some pictures on the side and a touch screen about chest high on the main box.

I turned to my wife and asked here what in the world that was, and she told me she thought it was a DVD rental machine. Hmmmm.... I thought, that is a weird way to rent a DVD. We drove on down that road, and soon I had forgotten all about that big RedBox. Over the course of the next month, I began to notice more RedBoxes (RedBoxi, RedBoxs?) at the other local McDonald's Restaurants. Still I was not compelled to stop their to rent a movie.

Don't get me wrong, I enjoy watching moving, but this DVD from a machine thing was just a little strange.

Related Video...

A Little About Me

Hi Everyone,

Welcome to my blog! My name is Jason Simpson, and I live in Bowling Green, KY. I have been married since May 22, 1999 to my beautiful wife Tami. We have 4 sons (Allen, Colby, Jeremiah, and Nathan).

I am President and CEO of J.A. Simpson Incorporated, a company that over the years have done various things. I have done Customer Support, Web pages, Internet Multimedia Development, and played the role of Project Manager with a Software Company. The running theme through all those careers, is the Internet. Pretty much every job I have undertaken over the course of my adult life has been sitting at a desk pecking away at my keyboard. It has been a pretty good deal.

As I right this, I am just 3 days away from my 30th birthday, so I decided there would never be a better time to sit down and see what this blogging thing was all about.

As I have gotten older, and my family has grown to 6, I have come to the conclusion that multiple income streams would be the prudent way to protect my family in this wonderful day an age of ups and downs that we live in. So a few months back I started to pay attention to the world around me, to see what kind of opportunities my present themselves. I had discussions with my friends, all of whom, to my surprise rattled off interesting ideas for developing another stream of income.

Then one day a number of months ago I was reminded of something that got me excited, but I don't want to get ahead of myself...

What This Blog is All About

For my first post, I guess I will give a quick overview of my purpose for writing this blog. Over the past few months I have been looking into purchasing a DVD rental kiosk. The search for information has not been as easy as I would have liked. Through all my searching, the things I had the hardest trouble finding were first hand accounts from people who have gone through this process before me. So I decided to start up this blog, and journal my experience from researcher to potential Kiosk owner.

I hope you find this blog to be informative and fun. Please comment often with questions, and I will do my best to give you good answers.