Our First DVD Rental Machine

Our DVD Rental Kiosk experience began in late 2003 when we decided to purchase our first machine from a USA Distributor selling an Italian machine called the Reillo.  We were able to convince our bank to loan us the funds and wire transfer to an unknown destination even though the industry was just getting started and redbox.com only had 10 test machines in the market.  The machine finally arrived from Italy and was installed on July 19, 2004.  We'll never forget that day because the install technician that had arrived by airplane had been just trained on this new machine was apparently nervous during the installation that he used a box knife and slipped while cutting the straps off the crate and cut his leg so deep we had to stop what we were doing while the anxious customers were looking on and drive to the emergency room and get him stitched up.  What a beginning to our Kiosk Venture!

Next was the shock that within weeks after the install of our first DVD Rental Machine, the US Distributor supplying our machines was shut down by the FCC and charged with committing fraud.  They were accused of taking funds from their customers and not ordering the machines from Italy. I suppose we were one of the lucky ones which received our DVD Kiosk, unlucky, because we now had to start searching for a company to supply us with machines to help us fulfill the installation contract we had just started because we were starting to have equipment failure and issues with the operation of the robotic arm and replacement parts were expensive coming from Italy not to mention our language barrier.

 
Our Next 5 DVD Rental Machines

After searching for a US manufacturer of DVD Kiosks we found Teleasy and discovered they were just developing their DVD Rental Machine so we decided to ‘dive’ in with them and help create the kiosk that we thought would work the best in our installations. They had been working on a unique carousel technology that had not been introduced by redbox yet. There machines were also smaller in size which was perfect for our c-store locations. Everything was finally starting to look as though we were going to get somewhere with our contracts and yet we couldn’t get Teleasy to redesign their rough implementation of the DACAL DC-300 technology and manufacture their own to avoid the many jams we were getting. Their final solution was to slow the process down in which their machine would dispense one (1) disc in 45 seconds and most of our customers were renting 3 a visit. OUCH! DACAL DC-300It wasn’t so bad on the rental side , when it did vend without owner operator intervention, but upon return most customers would ‘double stuff’ the return slot, which with Teleasy’s DVD Kiosk it was always possible, thus causing a carousel jam rendering the kiosk’s inventory indispensable. Two years with Teleasy was a learning experience and if anyone is thinking about buying or hosting the Teleasy DVD Rental Kiosk, please contact us first. It will save you a lot of headaches not to mention the financial loss.

 
Next Generation in Kiosk Ventures

DVD RENTAL MACHINEDuring our search for the next generation of DVD Rental Kiosks we came upon a vendor/manufacturer that wanted to create a machine that included the newer technology and enhance the already presented technologies of machines we had been operating. We had locations and distributors that desperately wanted machines, both to purchase and just for hosting at their grocery / c-store locations. Being that we just experienced 5 years of both operating and designing DVD Rental Machines in the market, we knew that there was just something missing in the profit center model. Our background comes from the old brick and mortar Video Store model where revenue sharing from the Hollywood Studios was common and would often sign contracts with RENTRAK to share the revenue earned from movie rentals by giving us the VHS or DVD for very little up front but then we would pay 40% or to the studios each week. This was a mutually beneficial situation for us and the studio because we got to have the movie for almost no upfront cost and we ended up making more money at the end of each month than we did if we had purchased the movie ourselves and tried to break even on each copy. We thought to ourselves many times, “now if there was only a way to do this with the DVD Rental Machine profit center model.” Nobody offered a revenue sharing model for the DVD Rental Kiosk but little did we know that our new partnership with this vendor/manufacturer would create the relationship to do just that.

 


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