DVDPlay’s Piper brings retail mindset

Former Safeway executive to help lead kiosk growth

By Danny King -- Video Business, 6/13/2008

JUNE 13 | With two decades of experience in the supermarket industry, DVDPlay’s new president and chief operating officer Charles Piper hopes to get the closely held movie-kiosk company to behave like the retailers it services.

“We’re transitioning from this very technology-focused company and are trying to complement that with a retail focus,” said Piper. “We’re going to end up being a store-within-a-store concept.”

Piper joins DVDPlay as the No. 3 U.S. movie-kiosk company plans to more than double its machines to about 3,200 this year from 1,300. Having most recently worked at Safeway and Safeway’s Blackhawk Network unit for eight years, Piper plans to help DVDPlay’s expansion by convincing supermarkets that movie kiosks are a better use of front-of-store real estate than coin-counting machines, supplied by companies such as Coinstar, or lottery-ticket dispensers. (Coinstar is co-owner of DVDPlay competitor Redbox, the largest rental kiosk operator.)

“How often does someone come in to dump their change compared to how often they come in for a movie,” said Piper. “We bring people back into the store more frequently.”

Retailers appear to be buying the argument by committing to install the machines for three- to five-year timeframes.

U.S. consumers, attracted by movie-kiosk prices that are lower than movie rentals at stores such as Blockbuster, will spend $800 million at kiosks by 2010, triple the amount spent last year, according to Convergence Consulting Group. Meanwhile, store rental revenue, estimated at $5.4 billion last year, will fall to $3.1 billion by 2010, according to Convergence.

Piper, who worked at now-Supervalu unit Albertsons for 11 years before joining Safeway, also will help DVDPlay expand its offerings to include high-definition Blu-ray discs and, potentially, videogames.

The company, which has a Blu-ray distribution agreement with Sony Pictures Home Entertainment, last week became the first kiosk company to offer Blu-ray titles when it began a trial in about 60 kiosks, according to Melissa Moore, DVDPlay’s senior VP of sales and marketing.

DVDPlay, which shares revenue from the machines with its retail partners, has tested videogame rentals and might develop manufacturing-on-demand machines, though Moore didn’t specify how wide the videogame trial will be or when the MOD kiosks would be rolled out.

All of which could help DVDPlay match the planned growth of larger kiosk competitors Redbox and TNR while staving off competition from Blockbuster, which is starting to add in-store kiosks.

Redbox, which last month said it would file for an initial public offering, plans to have about 11,000 kiosks by the end of next year, up from about 7,900 as of March 31.

Although DVDPlay to date has been almost exclusively in supermarkets, “we’re open to all formats” of retail operations, said Piper. He declined to be more specific about what types of retail stores DVDPlay would consider as partners.

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