HOUSTON, March 26, 2007 (PRIME NEWSWIRE) -- 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(tm) 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," Cohen 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 and rental
usage in more developed markets is substantially higher.
-- Kiosk adopters would most likely migrate from traditional "brick
and 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.
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