Self-Service Video Store - Can MoviebankUSA Succeed?

The company's opening a 500-square-foot store on West Houston Street in Manhattan that will house over 5,000 DVDs, video games and VHS videos.

That's about the same amount of inventory as a regular corner video store, but there'll be no human around.

In France, these kiosks abound: there are no longer traditional Blockbuster-type video rental stores.

I have been puzzled by how Blockbuster has managed to remain in existence, even though we're told weekly of its imminent demise.

The bottleneck in computer download speed remains Blockbuster's salvation; until you can instantly order and view any movie via your TV remote or telephone, the company will stay afloat.

Here's Jeffrey Selingo's story about the new movie vending machine, from Thursday's New York Times Circuits section.
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Want to Rent a Movie? Help Yourself

When VCR's appeared on the market in the early 1980's, renting movies was expensive and cumbersome.

It often required costly membership fees at video stores that were few and far between.

Since then, renting a movie has become a lot easier and cheaper.

Rental stores opened on what seemed like every city block.

The spread of DVD players spawned Netflix, the online rental service that sends movies by mail.

And now home viewers can rent movies from their cable companies or download them from the Internet, much like music.

Entering that crowded market is a new concept that in some ways is a throwback: A self-service video store.

MoviebankUSA plans to open a 500-square-foot store on West Houston Street in Manhattan that will house at least 5,000 DVD's, video games and VHS videos.

Its inventory will be about the same as that of a traditional video store, but there will be no human attendants.

The store will resemble a bank lobby full of vending machines that renters can use to select a movie or video game.

The machines will double as displays for movie trailers or video game promotions.

Customers return the movies or games to the same location.

The store is essentially a much larger version of the self-service video rental kiosks that have appeared in neighborhood convenience stores in Europe in recent years.

"In France, you cannot find traditional video stores any longer," said Stéphane de Laforcade, a co-founder of MoviebankUSA, who is French.

"People want convenience. In New York, you have a city that never sleeps, but you can't find a video store open at 3 in the morning."

Besides convenience and a large selection, Mr. de Laforcade is betting that customers will be attracted to the self-service store by the price. Movies will cost 99 cents for six hours or $2.50 for 24 hours with a free membership card.

Users can also reserve a movie in advance on the company's Web site, www.moviebankusa.com, and the video will be blocked from other customers at the store for three hours.

In addition, customers can sign up online to get an instant message or an e-mail when a movie that is not available is returned to the store's inventory.

Whether Americans will embrace self-service video stores is unclear. Such faceless services have had mixed success in the United States.

While A.T.M.'s and automated highway toll collections are popular, other experiments have failed.

For instance, four automated Redbox convenience stores in the Washington area, offering 130 items ranging from eggs to toilet paper, closed last year after only a year of operation.

Those stores failed because customers worried about freshness of the goods, said Michael L. Kasavana, a Michigan State University business professor whose position is endowed by the National Automatic Merchandising Association.

Although video-store customers would not have the same concerns, Dr. Kasavana remains skeptical of the idea.

"There was much more of a demand for what Redbox sold," he said. "Movie rentals are not as much of an impulse purchase."

While MoviebankUSA customers will be able to use the vending machines to search by actor, director, genre and new releases, Dr. Kasavana said the sheer number of movies available may lead some people to browse for a long time and hold up the line.

"It's like a restaurant with a 45-page menu," he said. "Sometimes you can have too many choices."

The DVD-rental market is also expected to peak in 2007, according to Kagan Research, a consulting firm that studies media markets, as cable companies roll out video-on-demand services and Internet movie downloads, already available on Web sites like www.movielink.com and www.cinemanow.com, gain popularity.

"There's nothing more convenient than sitting on your couch and renting a movie without moving," said Wade Holden, an analyst at Kagan.

Even so, Mr. de Laforcade is confident there is room for Moviebank- USA in the crowded video-rental market.

With Netflix, he said, customers have to wait several days for the DVD.

At full-service video stores, he said, not only are rentals more expensive, but movies are often hard to find and the selection, beyond new releases, is limited.

And of course the staff may not be helpful.

"Traditional video stores are nothing more than fast-food places - the people are there only to serve you," Mr. de Laforcade said.

"We're getting rid of the human where it has no advantage."

Mr. de Laforcade hopes to open eight MoviebankUSA stores in New York by the end of the year and 10 to 15 similar stores in other big United States cities in the coming years.

He also has put smaller self-service machines that hold 1,000 to 3,000 DVD's in the lobbies of two residential buildings in New York.

He plans to expand distribution of the smaller dispensing machines to office buildings and retail stores.