Houston, TX – March 26, 2007 –- In the first ever comprehensive national survey
of the rapidly growing DVD rental kiosk industry sector,
60% of current DVD renters expressed interest in renting
from self-service DVD movie rental kiosks. Based on
current consumer and retail market dynamics, this represents
a potential market approaching $1.0 billion accruing
to this sector over the next five years, applying selected
data from the nationwide survey recently completed by
TNR Entertainment Corp., the nation’s largest
owner and operator of DVD rental kiosks in supermarkets
and grocery stores, operating under The New Release™
brand.
“There are several compelling factors supporting
this significant migration from conventional rental
venues. In addition to the strong national consumer
interest highlighted in the survey, we have proven consumer
demand in existing kiosk installations, exploding retailer
adoption of the kiosk rental model, and the thousands
of potential retail rooftops nationally — which
translates into millions of future transactions,”
stated Richard B. Cohen, CEO of TNR Entertainment.
“Combined with installation forecasts of 25,000
or more retail sites over the next three years, these
factors reflect a market potential for the alternative
kiosk rental market approaching $1.0 billion,”
he added. “This survey further validates the significant
business opportunity we see for movie rental kiosks
as a viable alternative to ‘brick-and-mortar’
and online rentals. Our kiosk concept offers the appeal
of impulse rentals with a substantially lower cost structure
than the store-based model.”
To support growing consumer adoption of its low cost
DVD movie rental proposition and dramatic expansion
of its grocery store locations, TNR initiated this national
market research project to better understand the category,
consumers needs and behaviors and, most importantly,
to better service its rapidly expanding customer base.
“This survey provides us with greater insight
into this fast growth market segment and our customers
— existing and potential,” stated Tony Sciolla,
Chief Marketing Officer of TNR Entertainment. “It
allows us to more precisely define the customer base
in critical demographic and attitudinal ways so we can
better position our offerings and address their needs.
With our expanded knowledge of what consumers want,
we can successfully achieve our ultimate goal —
increasing same store sales from The New Release kiosks
for our retail partners and the company as well.”
“It also demonstrates the substantial opportunities
we have to firmly establish our brand leadership and
increase overall awareness, usage and adoption of the
movie rental kiosk value proposition,” Sciolla
added.
Among the findings in TNR’s pioneering survey:
- Grocery retail based DVD rental kiosks have broad
consumer appeal among men and women of all ages and
life stage classifications, especially those 30 to
54 years of age and families with children.
- The rental kiosk value proposition to consumers
is simple and compelling, driven by both lower movie
rental costs and unmatched convenience— the
“single trip” benefit.
- Reflecting the growth potential for the kiosk market,
awareness is still developing — approximately
1/3 of all consumers surveyed indicated awareness
of the self-serve DVD kiosk concept, but only 5% of
the respondents had rented through one. Awareness
& rental usage in more developed markets is substantially
higher.
- Kiosk adopters would most likely migrate from traditional
“brick & mortar” rental sources to
the grocery or rental kiosk.
- Over 1/3 of DVD renters are frequent grocery shoppers,
many visiting their grocery store on a daily basis.
The New Release automated DVD rental kiosks provide
supermarket customers with a more convenient one-stop
top shopping experience. As the Company’s kiosks
are being introduced in new markets, more consumers
are able to enjoy renting the latest DVD titles for
$1-a-day and no late fees — a simple and affordable
pricing structure that TNR was the first to successfully
market. TNR’s kiosks house up to 1,000 units each,
representing more than 200
titles, including top new releases. The fully-automated
kiosks operate on a wireless communications network
and next-generation DVD kiosk operating system.
Privately-held TNR, based in Houston, dominates the
self-service DVD rental category in the grocery channel.
TNR currently has more than 1,500 locations in such
grocery chains as A&P, Dillon’s, Food-4-Less,
Food Lion, Fry’s, H-E-B, Kroger, King Soopers,
Publix, Quality Food Centers, Ralph’s, Roundy’s/Pick
‘N Save, and Spartan/Family Fare.
Led by TNR Entertainment’s management team of
CEO Richard B. Cohen and COO Jeff Karbowiak, the Company’s
aggressive growth plans call for continuing national
expansion of its retail locations, in addition to the
three-fold increase of its kiosk network planned by
this year end, TNR completed a capital infusion of $45
million last year to support this major effort.
Based in Houston, Texas, TNR Entertainment Corp. is
backed by an institutional investor group including
Celerity Partners, LP of Los Angeles; Chapton Partners,
LP, a Houston family partnership; Laminar Direct Capital,
L.P., a member of the D.E. Shaw group of companies;
and MCG Capital Corporation (NASDAQ: MCGC), a leading
specialized financial services company and financial
advisor |
