The fledgling entertainment division of Duluth-based NCR Corp. has staged a coup in the movie business, and is continuing to look at ways it can expand its self-service entertainment options.
NCR, which owns and operates about 8,000 Blockbuster Express kiosks in the United States and Canada, announced Tuesday that it reached an agreement with two movie studios to offer new releases in the self-service rental stands.
Three studios -- 20th Century Fox, Universal and Warner Bros. -- let Blockbuster rent their new releases the same day the movies go on sale, but do not allow Netflix, redbox or other unconventional renters access to the films for 28 days.
NCR, which licenses the Blockbuster name for its kiosks but otherwise has no relation to the company, is starting a test with Fox and Universal through Jan. 17 in four cities -- including Atlanta -- to offer new titles for $2.99 a night. Older movies are available for $1 a night, and after 28 days, the newer movies will be available at the same price.
"For us, this is really about creating an offer for the customer that's differentiated," said Justin Hotard, vice president and general manager of the two-year-old NCR Entertainment division. "It's giving the customer more choice to get what they want."
It's also about big business. The company, which is testing automated Blu-ray rentals, video game rentals and DVD sales in other states, estimates Blockbuster Express will make about $100 million this year, and could be a $1 billion business.
A spokesman for redbox, Chris Goodrich, said that company is happy with the agreements it has in place at this time, but that any changes would have to have value to the consumer in terms of price.
"Ideally, we would offer all movies on the day and date they are released," he said. "That certainly is the ideal situation."
The NCR trial will also be held in Miami, San Francisco and Phoenix.
NCRtraditionally makes ATMs and self-checkout technology. This is its first major direct-to-consumer business, and the company has "great aspirations" for its entertainment division, Hotard said, which includes airport kiosks where travelers can download movies or music.
"It's really about being convenient," he said. "When you make it easier for customers to do business with you, they do more of it."
Hotard said the market is shifting toward self-service for a number of things, including entertainment, and NCR will continue to look for opportunities to expand the model.
In addition to rentals, he said there are opportunities to sell the hardware or software, or to run the kiosks for companies selling other products.
"We see it as a global business over time," he said. "We see the potential for many different business models."
NCR likely received the deal because it did not have the confrontational relationship with the studios that some competitors did, said Gil Luria, senior vice president of Wedbush brokerage in Los Angeles.
"I think it's a big part of where they expect growth to come from," he said. "It's growing by far the fastest of any of NCR's businesses."
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