NCR Corp. (NCR - Analyst Report) recently announced the opening of self-service BLOCKBUSTER-Express DVD Kiosks in more than 800 grocery stores operating under the Delhaize Group (DEG - Snapshot Report). The kiosks will be installed at stores in 11 states in the Southeast and Mid-Atlantic.
Delhaize Group is a Belgian international food retailer operating in North America, Europe and Southeast Asia. The DVD kiosks will be placed mostly in the Food Lion stores. Some kiosks will also be placed in other stores operating under the Group like Bottom Dollar Food, Harvey’s and Reid's.
Customers visiting the stores can now rent DVDs 24x7 through credit or debit cards. They don’t even need a membership for renting any movie from the wide choice offered at the kiosks. DVDs will be available at a rent of $1 per night and can be returned at any Blockbuster Express kiosk.
Apart from the above-mentioned stores, NCR Corp. also has Blockbuster kiosks at BI-LO, RaceTrac, QuikTrip, Kwik Trip, Xtra Mart, Sheetz, Tom Thumb, Randalls, Basha’s Family of Stores, Duane Reade and Brookshire Grocery.
Initially, NCR Corp. had a target of installing 10,000 kiosks by the end of 2011, but has now raised it by a thousand. Even then, the company trails Coinstar Inc.’s Redbox brand.
In an attempt to capture a big share of the DVD kiosk market, the company is now offering DVD-vending machines to CD, DVD and video game retailers. The marketing strategy will allow NCR Corp. to free up space in its stores, making more DVD-Kiosks accessible to customers.
We believe NCR Corp. will be able to capitalize on the growth potential in the DVD kiosk business. As per market sources, roughly 60% of people borrowing DVDs prefer to do so through self-service kiosks.
Despite the opportunity in the DVD kiosk business, we remain somewhat cautious on growing competition from online streaming. Netflix Inc. (NFLX - Analyst Report) leads this space, and the company’s growing success has resulted in a recent tie-up with Apple Inc. (AAPL - Analyst Report).
Currently, NCR Corp. has a Zacks #2 Rank, which translates into a short-term Buy recommendation.