Kiosk.net

Double-Oh-Steven wrote a couple of months ago that Netflix was going to stock HD DVDs. It now is. Glory to Netflix!

I have it on semi-good authority that cable-TV giant Comcast is experiencing a lot of problems with its Motorola DVR-boxes. The info I got was a bit vague on whether it is a hardware or a software failure, but it is definitely a failure that requires a Comcast technician to swap boxes on-site. Whatever shows the customer with a faulty box has recorded are lost.

Comcast is hoping that the new, soon-to-be-rolled-out DVR boxes from will fix the problem and also improve the overall experience.

It’s hard out there for America’s second biggest movie rental chain, Movie Gallery. Its share price is going down and its time is running out. BusinessWeek passes along the word on the Street:

Movie Gallery Inc., the nation’s No. 2 movie rental chain, saw its shares slide to a fresh 52-week trough Thursday after an analyst warned the company may be running low on cash.

Bear Stearns analyst Glen Reid cautioned investors that he now expects the company to record negative cash flow this year rather than starting in 2007.

Movie Gallery has been calling lenders requesting covenant relief for all of 2006, according to DebtWire, a news service read closely by bond traders, which the Bear Stearns analyst cited in his research report.

The already competitive market for digital-film kiosks is about to be entered by computer giant HP:

Last month, the company unveiled two photo kiosks, the Photosmart Express and Photosmart Studio. The former is a standalone unit that only produces 4×6 prints, but very quickly; the latter connects to a larger behind-the-counter system for one-hour service.

“It really comes down to following where the customer wants to go,” said Kalle Marsal, director of marketing for HP’s retail photo solutions group. “We see the same customer having the need to do photo printing and activities in the home, online and at retail, depending on the situation and depending on the day. It was pretty clear to us that we needed to have a strong offering in the retail photo space if we wanted to be the leader in photo.”

HP is betting on high-quality, high-speed printouts, and also a lighter touch:

While idle, the machine rotates through a series of humorous, lighthearted messages designed to put the potential customer at ease: “Touch my screen — I won’t bite.” “You can crop and zoom, like ex-boyfriends.” “Touch my screen to begin — careful, I’m ticklish.”

I think last night’s Oscars show symbolizes at least some of Hollywood’s self-created problems, starting with the underwhelming host, Jon Stewart of “The Daily Show” fame, and culminating with the pimp-song dance routine. It trivializes where it should be grand and it glorifies what should be, if not condemned, at least treated with caution and scepticism.

Hollywood is indeed out of touch, but perhaps not in the way that George Clooney meant in his speech. One can hardly expect a small sub-group of America to closely resemble the political leanings of all of America, but it should be fully reasonable to expect Hollywood to master audience-dazzling entertainment.

Cute little story about “Elsa Letterseed” and an indie film maker who gets a boost after Netflix mistakenly lists her debut film in its catalog:

“Elsa Letterseed,” a low-budget film about a young violinist’s struggles in adulthood, was written, produced and directed by 34-year-old Sacramentan Sarah Kreutz. It was screened at the Crest Theatre in August 2003. And went no further.

But late last year, the film inadvertently appeared in the online catalog of Netflix, the company that charges a monthly fee to ship rental DVDs to its customers nationwide. Even though not a single DVD of the film existed.

That led to negotiations between Netflix and Kreutz. The result: The company will buy copies of the film from the Sacramento filmmaker and start offering them to its 4.2 million customers later this month.

Kreutz is working feverishly to do some last-minute editing, add musical scoring and then produce about 1,000 copies of her movie, which tells the story of a child prodigy’s adulthood.

She doesn’t expect the Netflix deal - or sales to other rental companies - to fully repay the $200,000 or so she has invested in her film, which she started while in her 20s. But it’s given her the confidence - and the cash - to start on her second film.

News & Record in Greensboro, North Carolina, has an article on a low-profile Netflix warehouse in North Carolina:

Every morning, a truck backs up to an anonymous office building off Gallimore Dairy Road carrying the lifeblood of Netflix.com.

Inside the truck are about 35,000 DVDs, all the titles sent to the company that day by its North Carolina members.

Here in this nondescript office park — the company posts no signs on its leased building and asks its address not be divulged — is the brick and mortar of one of the Internet’s hottest spots for movie rentals. Here, the work gets done after subscribers choose their movies on the Web site that has created a new way to rent DVDs and attracted 4.2 million subscribers nationwide.

The local hub, essentially a high-tech mailing operation, has nothing but Netflix banners and movie posters adorning the walls of the open workroom inside.

During the workday, 25 workers rip open all the red mailers that come in, catalog them and dispatch a new batch in red envelopes.

In between, they use a mix of secret software, simple hand work and split-second timing to keep the DVDs circulating and provide the quick turnaround that Netflix customers have grown accustomed to.

…

The workers here use a mix of basic skills and computer training to keep the process moving. Netflix workers in Greensboro come from all kinds of careers, from the Postal Service to teaching. They all get benefits, Swasey said. He declined to say what their pay range is but said that after a three-month probation, every worker gets a free DVD player and is encouraged to take movies home to watch.

The Netflix building is unmarked for security and competitive reasons, Swasey said, but “mainly, we don’t want customers stopping by to drop off their DVDs.”

While online movie rentals is a steadily growing business, many customers obviously prefer the old brick-and-mortar way of renting. As part of Blockbuster’s cutbacks, the rental giant’s store in Battle Creek, Michigan, has been closed. But, according to Battle Creek Enquirer, many Heartland customers aren’t quite ready to switch to online movie renting:

Denna Root, manager of Family Video in Battle Creek, said online movie rentals might be affecting the video store industry, but has not affected her bottom line.

“This store is running a 44 percent (sales) increase over last year,” she said, explaining that Springfield, Ill.-based Family Video is a regional chain with about 450 stores in the Midwest. “The company is expanding.”

California-based Netflix, the country’s leading online movie rental service, reported in January that subscribers increased 60 percent in 2005 to 4.2 million.

“(Last year) was another year of solid achievement and continued momentum,” Reed Hastings, Netflix co-founder and chief executive officer, said in a Jan. 24 press release. “We enter 2006 confident we can reach our goal of 20 million subscribers within the 2010 to 2012 time frame.”

…

Root, with Family Video, said although online movie rentals are growing in popularity, there will always be a market for video stores.

“It’s a completely different type of customer we get here,” she said. “The ones that rent online are more computer savvy — they’re the ones that don’t want to leave the house for their movies.

“Our customers are people who like to come in and pick up the videos, flip them over and read the back covers,” she said. “They want to browse. They also want instant gratification. They don’t want to plan ahead to get their movies. If it comes out on Tuesday, they want it Tuesday.”

Another draw, Root said, are the free kids’ videos offered by many video stores.

“We have a lot of customers who come in specifically because they can get their kids’ movies free when they’re renting something for themselves,” she said.

Pam Gibson of Battle Creek has been a mail carrier for 14 years and said it was just in the past couple of years that DVD envelopes began turning up in her mailbag. Most of them, she said, are the red Netflix envelopes.

“It’s really increased in the past six months though,” she said. “Still, there’s only about half a dozen houses on my route that get them three or four times a week.”

There’s no doubt that traditional video stores will have to work harder and harder to bring customers to their stores. Perhaps they’ll have to borrow a page from bookstores like Barnes & Noble and allow customers the opportunity to sit down and watch movies in a comfortable environment while enjoying a high-priced premium beverage?