Flexplay targets niche markets

Disposable discs available at truck stops, airports

By Jennifer Netherby -- Video Business, 6/5/2008

JUNE 5 | Staples isn’t the only store where consumers will be able to find Flexplay Entertainment’s disposable DVDs when the no-return discs make a comeback this month.

Atlanta-based Flexplay has been testing sales of the discs in truck stops across the country since last fall and is now rolling out to several thousand locations nationwide, said executive VP of marketing Joe Fuller.

Flexplay is selling discs in trucking chains Travel Centers of America and Luv’s Country Stores. Flexplay also has a deal with airport retailer Paradies, which is selling the discs at newsstands it operates at the Hartsfield-Jackson Atlanta International Airport and several other airport locations.

The push into Staples, announced a week ago, and travel stores plays into Flexplay’s new strategy of targeting the less frequent movie consumer.

“Portable rental product is just a natural for travelers,” Fuller said. At Staples, the company will target small-business owners and business travelers.

Flexplay’s time-limited discs play for 48 hours after they’ve been removed from their sealed packages, essentially making them disposable rental discs.

Flexplay has tried to build a market for its time-limited discs before, doing a trial in 2003 with Walt Disney Studios Home Entertainment. Disney sold movies on the disposable discs, dubbed EZ-D, in 7-Eleven stores and through pizza chain Papa John’s in select cities for a year before giving up on the concept.

The reinvented Flexplay is hoping to lure the studio back and bring others on board.

A lot has changed since Flexplay first tried to sell disposable discs. In 2004, Flexplay Technologies (parent of Flexplay Entertainment) was bought by the Convex Group, which took the lessons from the failed 2003 trials and incorporated them into a new strategy for the company.

The company has dropped the price on its discs to $4 to $6 and revamped its business model to go after non-renters rather than take on traditional DVD retailers.

Warner Home Video, New Line Home Entertainment, Paramount Home Entertainment and DreamWorks have signed licensing deals allowing Flexplay to sell disposable disc versions of select movies. In most cases, the studios aren’t releasing movies on Flexplay until a month or more after they’ve streeted on DVD, and the studios aren’t putting all their movies on Flexplay discs. Current new releases on Flexplay include There Will Be Blood, Rush Hour 3 and The Kite Runner.

Execs with the partner studios weren’t available or didn’t return calls about the deal.

Fuller said the delayed release won’t hurt Flexplay since it isn’t targeting regular movie renters, but is instead going after the “out-of-market customer that isn’t that engaged.”

“Even with a title that is a month or more old, there is a large base of customers that hasn’t seen the film and probably never will rent that movie,” he said.

Further differentiating the discs from standard DVD, Flexplay isn’t selling discs in stores that already carry DVD and is targeting alternative markets to reach these customers such as travel stops and convenience stores. The company also plans to sell its discs directly to consumers online at www.Flexplay.com.

Randy Parker, former CEO of disc distributor Entertainment Resource Inc., was brought in as CEO because of his experience in working with alternative DVD retailers. ERI specialized in servicing grocery and drug stores before closing in 2006.

At Staples and other retailers, Flexplay will handle distribution and manage the title selection with the retailer. The company has a deal with Barjam for distribution at truck stops. Retailers will sell 20-25 different titles at a time.

“Our goal is to offer consumers another way to consume more content more often,” Fuller said.

The company plans to begin testing a Blu-ray Disc version of Flexplay later this year with its replicator Cinram, but Fuller said the company will continue to watch the Blu-ray market for the right time to introduce it.