NCR Corporation's acquisition of TNR Holdings, the second largest operator of video rental kiosks in the U.S. behind Redbox, may enable Blockbuster Entertainment to expand its kiosk program as it seeks to move towards it goal of operating 10,000 vending units by the end of next year. NCR and Blockbuster are partners in the retailer's Blockbuster Express kiosk program.
"Blockbuster would like to congratulate NCR on its acquisition of TNR Entertainment," said Jim Keyes, chairman and CEO of Blockbuster, in a press release. "We remain excited about DVD vending, and through our alliance with NCR, we are poised to participate in the category's growth. We believe NCR's acquisition sets the stage for aggressive growth and will further our goal of deploying thousands of Blockbuster Express branded kiosks by next year, providing another platform to give consumers added control, flexibility and convenience that goes beyond our traditional store locations."
TNR currently operates more than 2,200 kiosks at supermarkets and other locations under the "MovieCube" and "The New Release" brands. As a point of comparison, Redbox currently operates 14,000 units. A decision has not been made yet as to whether TNR's current boxes will be rebranded as Blockbuster Express units.
Last month, according to a report by The Dallas Morning News, Mr. Keyes told analysts he was "glad that our friends at Redbox proved it out, because it is a good consumer proposition." He believes the business will move from dispensing DVDs stored inside a vendor to a digital downloading model.
The deal for TNR comes on the heels of a recent disclosure by Blockbuster that it was having trouble meeting the requirements of its $250 million credit facility raising "substantial doubt" about its viability.
Discussion Questions: What are your thoughts on NCR's acquisition of TNR and its implications for the expansion of Blockbuster Express? Why the further investment now in kiosks if the speculation is that the business will evolve into digital downloads?