Blockbuster Testing DVD Vending Machines

$1 DVD Rental Machines Set Up in Kentucky Papa John's, Family Dollar

DALLAS, Texas (Blue MauMau) - Blockbuster is exploring the distribution of $1 overnight DVDs through vending machines.  These vending machines, branded Blockbuster Express, have been placed in 10 Papa Johns and Family Dollar locations in Lexington, Kentucky. There are a small number in other cities at retail locations. Blockbuster would not reveal which cities or other retailers are testing the machines.

Amidst an onslaught of new technologies and competitive innovation from the likes of Netflix online rental and Redbox Automated Retail LLC, jointly owned by McDonald's Corp., Blockbuster is exploring increasing market presence by providing consumers with new ways to access media entertainment.

Randy Hargrove, Senior Director of Blockbuster Corporate Communications, says, "We see vending as a possible way to enhance brand awareness and consumer relevance by making Blockbuster more convenient, which we believe could benefit the Company, our franchisees and shareholders."

Blockbuster is attempting to branch out from being thought of as a DVD rental company to being a brand that enables customers to get media entertainment through increasingly convenient ways. Hargrove elaborates, "Our strategy calls for us to restore our Rental DVD business, facilitate an in-store transition from rental to retail, and position the company for an eventual transformation from DVD to digital delivery."

Vending machines have potential to eat into DVD rental revenue from franchised stores in the area. When asked where revenues from the vending machines would go, Mr. Hargrove stated, "Blockbuster licenses the vending machines and does not own them. We have not identified the owner or financial details of the licensing agreement."

A franchise owner informed Blue MauMau that Blockbuster announced the new vending machines to its network of franchise owners in a recent Town Hall Conference Call. The company vowed it would not place vending machines in franchise territories so as to compete with them.

The experimental DVD machines have been placed in corporate owned stores in Lexington, Kentucky.

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Photo by Blue MauMau