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.