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DVD kiosks steal the show as consumers skip rental stores

BY Barbara White-Sax

Kiosks are becoming a more important venue for video rentals. Attracted by the convenience and value pricing, more consumers are opting to rent from the vending machine-type kiosks. Experts said there’s plenty of upside to the business for the drug channel.

“We’re still in the early stages of this business,” said Eric Handler, a media and entertainment analyst for MKM Partners, a New York-based institutional equity trading and research firm. “Penetration in supermarkets and drug stores is still relatively low, so there are a lot of areas for kiosks to expand.”

Handler said kiosks are poised to become a more significant part of the rental business because they offer a low-cost alternative. “Downloads continue to build momentum, but they are still $4 or $5 a pop, and kiosk rentals are $1 to $2 a day.”

A recent study by Market Force Information revealed that more than 40% of consumers said they would rent a movie at a kiosk, compared with 36% who said they would do so at a video store. The study revealed that purchasing movies from cable subscriptions falls behind kiosks in frequency—15% of consumers said they watch movies rented through cable providers.

The report also said that more consumers who said they planned to rent more DVDs or Blu-Ray discs said they would do so at kiosks rather than through subscription-based rental services, through their cable TV subscriptions or at video stores.

“Kiosk rentals should account for about 30% of all rentals in 2010,” said Jeff Dudash, a spokesman for NCR. NCR has become a big player in the category with its Blockbuster-branded kiosks. The company had no kiosks in stores in 2009; now more than 4,000 locations in the United States contain a Blockbuster rental unit.

Dudash said kiosks continue to grab share from other rental channels—a trend he said is driven by the convenience aspect the kiosks offer consumers and the low $1-a-day rental price. “Convenience and cost are really driving the trend. There are a lot of ways to get a movie, but kiosks are convenient because they are located in places the consumer is already visiting,” Dudash said. “Consumers can pick up a DVD near work and return it near home, or pick it up and have the kids watch it in the car and return it when they get to their destination. It offers a lot of flexibility.”

Retailers like the kiosks because they guarantee a return trip to the store. Coupons and joint promotions also can be tailored to individual retailers.

One issue with the kiosks has been timing on new releases. Some studios want to create a delay on when new releases could become available to kiosks because of their low prices. “The question still remains whether there will be a window where kiosks won’t have new releases yet,” Handler said. Value-conscious consumers may not mind the wait.

The units can hold hundreds of DVDs. Volume is based on usage, and NCR tailors the selection in its Blockbuster units based on market preferences. “Our units hold as many as 950 DVDs, while most competitors hold about 500,” Dudash said. “New releases have to be predominant, but older releases have a place. When the new Harry Potter movie comes out, we’ll offer older Harry Potter rentals as well.”

Since technology is changing so rapidly, video rental companies are keeping their eye on the future. “We’re thinking about the future of entertainment, and we don’t want our units to become dinosaurs as people shift to digital download,” Dudash said. While he thinks that shift will take five to six years, NCR is working to enable its units to allow consumers to download movies on portable SD cards.

“Our kiosks will easily evolve to the medium of choice,” he said. The company already has some technical trials in the Dallas; Portland, Ore.; and Seattle markets. “We want to have a solution that makes sense for consumers, so we’ll be rolling out our testing more aggressively this year.”

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Retail clinics: Improved care at a lower cost

BY Michael Johnsen

WHAT IT MEANS AND WHY IT’S IMPORTANT Retail clinics. Save. Money. Without regard to who’s footing the bill exactly — healthcare payer or Jane Patient — retail clinics not only represent a significant cost savings across the board, but by siphoning nonemergency-yet-still-urgent cases out of the emergency rooms and doctors’ offices, retail clinics also can contribute to improved care across the healthcare continuum.

(THE NEWS: Study: Retail clinics save nonemergency patients money. For the full story, click here)

All told there were 119.2 million total ER visits in 2006, up 8.2% as compared with 2004, according to ACEP. Extrapolate that figure with WellPoint’s finding that 19.4% of those visits may be for nonemergencies across the entire nation, and the fuzzy math equates to an approximate 23.1 million non-emergency patients presenting across some 3,833 ERs. For whoever is paying for the cost of care, that’s an expenditure totaling $10.2 billion if every case were to present at an ER; as compared to $1.2 billion if every case were to present at a retail clinic. That’s the cost savings piece.

But cost savings aren’t the only benefit retail clinics afford the overall healthcare system —  there’s a general improvement in care. According to the American College of Emergency Physicians, average waiting times for patients triaged with non-emergency ailments at emergency departments range between one and two hours, but only when the ER isn’t crowded. That’s like saying that bee stings don’t hurt, you know, except when they do.

Let’s face it, in a nation of 309 million and counting, there are simply not enough points of care, be it for an emergency or nonemergency situation. Taking nonemergency visits out of emergency rooms would likely improve the efficiency of care for more critical patients, as well as the experience of care for noncritical patients. That’s the improved care piece.

Improved care at a lower cost, that’s what retail clinics bring to the table.

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Tide brings Loads of Hope to Dollar General

BY Allison Cerra

NASHVILLE Tide brought its mobile laundromat to a local Dollar General to benefit victims of the recent floods.

Tide’s Loads of Hope program visited a Nashville Dollar General May 12 to provide customers in the area with clean laundry. One truck and a fleet of vans house more than 32 energy-efficient washers and dryers that are capable of cleaning over 300 loads of laundry every day. Tide washs, dries and folds the clothes for these families for free.

The Loads of Hope program also benefited victims of Hurricanes Katrina and Ike, in addition to other natural disasters.

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