The logic seems pretty airtight: As digital streaming increases, the kiosks that deliver physical discs will face extinction. But there’s market entrants out there that makes this equation something more than a zero-sum game.
“Ultimately, it will be impossible for physical disc kiosks to compete with the in-home or in-store download-to-rent business model,” writes Keith Nissen of In-Stat in the research firm’s latest projections for the home-video market, which predict a massive $4.6 billion drop from 2009 to 2014. Meanwhile, broadband streaming and downloading are projected to climb by $4 billion over the same span.
No surprises there, but some attention being paid some new technology in programming delivery renders this a bit more complicated than what appears at first glance. Automated Vending Technologies recently announced the deployment of Flix On Stix, which enables anyone with a USB flash drive to quickly download a movie for purchase or rental from 20,000 kiosks being distributed around the country, from college campuses to shopping malls. While taking on the likes of Redbox is not exactly advisable, the tweak AVT has made on the core product here is pretty significant: Rentals, for instance, simply expire from the consumer’s flash drive or hard drive in accordance with the allotted window, which means there’s no need to make a second trip to return a disc back to a kiosk, nor are there late fees.
Should Flix On Stix, or similar sideloading Flash-based ventures like the ones being created by MOD Systems, take hold, they may be able to make a dent in this marketplace for another reason besides the no-disc convenience. Think about the possibility that usage-based pricing, a very possible outcome of the network-neutrality guidelines the FCC is currently weighing, could be imposed by leading broadband providers in the U.S. Flash drives could very well be an attractive option for the growing number of consumers who want digital delivery but may balk at the extra price tag UBP could bring to streaming transactions. If the business model is such that the cost of gas to drive to the kiosk is cheaper than the broadband surcharge, kiosks won’t necessarily seem as endangered a species as you might expect.
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