DVDPlay growth draws cash

UPDATE: Secures $20 million in financing for expansion

By Susanne Ault -- Video Business, 6/27/2006

JUNE 27 | Rental kiosk company DVDPlay has rented its 5 millionth movie and expects to double that figure by the end of this year. Coming on the heels of that milestone, DVDPlay also has scored $20 million in new equity financing from a group of investors.

The support will be used toward DVDPlay’s expansion through 2007. Currently, DVDPlay has installed machines in 500 locations and hopes to have kiosks in an additional 700 spots by the end of this year.

Participants in the funding include El Dorado Ventures, Emergence Capital Partners, Palo Alto Venture Partners and Vanguard Ventures.

Coinciding with the moves, Chuck Berger has been named chair, president and CEO of DVDPlay. He has served as a non-executive chair at the company since 2001.

“We reached the 4 million rental mark Dec. 19, 2005, the 5 million mark on June 15, 2006, and we expect to hit 10 million rentals by year end,” Berger said. “Our automated kiosks are rapidly expanding in retail stores, and consumer acceptance has surpassed even our most optimistic plans.”

DVDPlay rents films for $1 to $1.49 a night at such locations as grocery and convenience stores and military bases.

In related industry news, kiosk giant Redbox has grown into 1,400 locations as it completes its expansion into grocery chains Stop & Shop and Giant Food. At this time last year, Redbox machines were in 500 locations at mostly McDonald’s restaurants.

By late June, Redbox had surpassed 14 million rentals, with 11 million occurring over the past 12 months. It similarly charges $1 a night per rental.