Warner, Paramount put titles on SD cards

UPDATE: Studios sign on to MOD Systems kiosks

By Paul Sweeting and Marcy Magiera -- Video Business, 1/8/2009

JAN. 8 | LAS VEGAS—MOD Systems has signed deals with Warner Bros. and Paramount Digital Entertainment to make their movies available via downloads to SD cards at kiosks in retail stores later this year.

In a related move, longtime indie retailer and Screenplay founder Mark Vrieling has joined MOD Systems as chief content officer.

In his new role, which was finalized last week, Vrieling will be responsible for securing content from the studios and other program suppliers for MOD’s prospective download-to-SD-card system, developing the title assortment to be included and helping MOD refine its retail implementation.

Warner and Paramount are the first major studios to join indie suppliers including Anchor Bay Entertainment, First Look Studios and Image Entertainment in making titles available to MOD, which said it now has rights to 4,000 video titles and 4 million music tracks. MOD is scouting pilot retail locations for a launch of the digital video service sometime this year.

Vrieling will continue to oversee Screenplay but is expected to dedicate the majority of his time to MOD.

“I think the two are actually a perfect marriage,” Vrieling told VB at the Consumer Electronics Show here.

Once MOD is up and running, Vrieling hopes to integrate it with Screenplay so that Screenplay clients will be able to offer customers a digital rental or purchase option in their stores along with streamed movie previews.

“Because of Screenplay, I already have a lot of the pieces in place to do this for the retailer, in terms of ingesting content, managing the metadata, accounting and auditing,” he said. “It’s what I’ve been working toward for a long time.”

Vrieling said MOD is in talks with all the major studios but declined to comment on whether any other deals are imminent.

“The thing that is most interesting to the studios is expanded points of distribution,” MOD vice chairman and co-founder Anthony Bay said. “If they can use this to get distribution in airports and convenience stores and other places where DVD doesn’t have much of a presence, that’s all upside for them.”

Bay said he expects the download-to-SD-card system to deploy at retail, at least on a test basis, this year. It will be possible to start a test with just two major studios on board, he said.

Bay wouldn’t say when he expects to sign other studios, but added, “different studios have different concerns, but nobody thinks it’s a bad idea. They all get that this can and should be part of their digital strategy.”

“I think people are coming around to seeing SD as the right portable format,” he said. “Optical disc is not a good portable format, and other things like USB drives, flash drives, are not secure.”

The first retail deployments are likely to follow the “retail-attended model,” in which consumers will browse, select and order titles from a touch screen, but the final fulfillment will be from a manned station in the store, before transitioning to a fully automated system, Bay said.

MOD last year raised $35 million in a first round of venture funding led by Toshiba and NCR, which took minority stakes in the startup.

Toshiba is expected to roll out a line of set-top boxes with SD card slots for playing back digital video downloads saved to the memory cards. ATM maker NCR, which has swiftly expanded into the DVD kiosk business, will build the digital kiosks MOD plans to roll out to stores.

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