NCR acquires kiosk operator TNR/MovieCube

Deal accelerates Blockbuster Express kiosk program

By Danny King -- Video Business, 4/21/2009

APRIL 21 | ATM-making giant NCR has acquired the majority stake in movie-rental kiosk operator TNR Holdings, which will speed up the kiosk-making partnership it began with Blockbuster last year.

NCR already owned a minority stake in TNR, whose The New Release and MovieCube brands made it the No. 2 U.S. movie-rental kiosk operator to Redbox, the company said in a statement today. No financial terms were disclosed. MCG Capital Corp. was among the sellers of TNR.

“Bringing in TNR really complements us with an experience we don’t have and helps us accelerate the strategy” of making Blockbuster Express machines, said NCR spokesman Jeff Dudash, adding that NCR will own and operate the machines. “It gets us there a little more quickly and efficiently.”

“This acquisition is a major step forward in NCR’s strategy of becoming the leading provider of self-service entertainment solutions and will deliver the best and broadest media offerings to our customers through our partnership with Blockbuster,” John Bruno, executive VP of NCR’s industry solutions group, said in the statement.

NCR wouldn’t specify how many TNR kiosks it will get in the acquisition, but at the time it took a minority stake in TNR last year, TNR had about 2,200 machines in North America with plans to add another 1,400, primarily in grocery chains such as Albertson’s, Ralph’s and Kroger. The Blockbuster-NCR partnership started last year with about 50 Blockbuster-branded kiosks.

“We believe NCR’s acquisition sets the stage for aggressive growth and will further our goal of deploying thousands of Blockbuster Express-branded kiosks by next year,” Blockbuster CEO Jim Keyes said in a statement.

The acquisition speeds up the effort by Blockbuster to expand its business beyond its in-store and digital delivery services by entering the rapidly growing kiosk market. U.S. rental revenue from kiosks are expected to more than double between last year and 2011 to $1 billion, and traditional in-store sales are expected to fall during the same period, according to Adams Media Research.

Coinstar’s Redbox unit operates about 12,900 rental kiosks, which are placed in such chains as Wal-Mart, Walgreens and McDonald’s. The company plans to install as many as 8,000 new machines this year.

Last month, Blockbuster CEO Jim Keyes said the company was in the "final stages" of testing the kiosks it was developing with NCR. The partnership, struck last year, was on track to develop as many as 10,000 kiosks operating by mid-2010, Keyes said last month.