Market Watch

EntertainmentXpress Pushes DVD Kiosks with Big Plans for 2011



EntertainmentXpress says it is on schedule to roll out in quantity next year an advanced DVD kiosk that adds some new wrinkles to the vending machine business model.

  • Retailers providing sites will get the most conspicuous branding on the kiosk, in a kind of white label approach, so the hosting retailers' names will be more prominent than EntertainmentXpress.
  • Its retailers will be able to offer custom pricing programs, including membership-like rentals with flat fees for their cluster of kiosks.
  • Though its standard kiosk design is still being worked out, EntertainmentXpress plans for its hardware to sport 3D displays.
  • Its program will include selling advertisements on kiosk displays and EntertainmentXpress will share ad revenue with retailers.

Analysis
EntertainmentXpress, a Sausalito, CA-based unit of Public Media Works, announced September 8 a deployment at a ConocoPhillips gas station in Los Angeles. Though it is just a small step, the company hopes this initial win will eventually mushroom into 7,000 installations at gas stations as part of a tie-up with Modular Conversions, which builds convenience stores at such locations. EntertainmentXpress will pay for the manufacture of some of its kiosks but will also ask third-party partners such as Modular Conversions to finance manufacturing, to be paid back in installments.

At the moment, EntertainmentXpress has just a few kiosks in operation as it works out kinks. Company president Bill Zabit says its plan is to finalize kiosk hardware and retailer partnerships by December, with the intent of rolling out 2,500 to 3,500 kiosks in 2011. The plan is to stock games as well as DVDs.

EntertainmentXpress has ambitions of taking on Coinstar/Redbox and NCR's Blockbuster Express in the kiosk business, though it faces an uphill battle for both locations and financing. Its parent, Public Media Works, is a small public company traded on the bulletin board with a micro-market capitalization of just $26m. It was previously focused on film production.

Public Media's chairman is Martin Greenwald, who was the founder and long time chief of video distributor Image Entertainment, which he exited in January. EntertainmentXpress says that its board of directors includes ex-Warner marketing executive Ed Frumkes and film producer Joseph Merhi. Its advisory board includes actor/producer Corbin Bernsen and Safeway stores senior executive Henry Michon.

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