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NCR Corp. (NCR) has won a contract to place its DVD rental kiosks in outlets of Kwik Trip Inc., a convenience store and gas station chain with about 500 locations across Iowa, Minnesota and Wisconsin.
NCR will begin placing its kiosks, which are licensed under the Blockbuster Express brand, in Kwik Trip stores beginning next month.
NCR Entertainment President Alex Camara said in an interview that NCR currently has just under 5,000 self-serve rental kiosks and "so far, everything's going OK" as the company aims to reach 10,000 by the end of 2010. He said NCR should hit 7,000 by the end of June.
Camara also confirmed the company plans to begin selling DVDs at its kiosks this summer, though it hasn't yet signed any agreements with movie studios.
"We've got the technology down, we've got the capabilities to do this," Camara said. Studios are "very interested."
News of the DVD sales was first reported by Bloomberg Thursday night.
Shares of Blockbuster Inc. (BBI) rallied Friday, closing up 10.1% at 40 cents. Blockbuster has been in talks with lenders this spring as it tries to sidestep bankruptcy.
NCR closed Friday down 2.51% at $15.12.
Camara told Dow Jones Newswires that NCR likely wouldn't discount the DVDs like some brick-and-mortar retailers do, since the kiosks can't offset losses with many other offerings. He also noted that some supermarkets that the company operates in may already sell DVDs and could prohibit NCR from selling them as well. NCR has outlets in Publix Super Markets Inc. (PUSH), Sheetz Inc. and other stores.
Camara also confirmed that NCR is in talks with studios to rent new-release DVDs for $2 per day, double its current rate and double the rate of competitor Redbox Automated Retail, a unit of Coinstar Inc. (CSTR). The company now offers a catalogue of older movies from studios and purchases new-release movies from third-party retailers to skirt a block that studios have on some outlets renting DVDs within the first 28 days of release.
Camara didn't provide any timeline for when NCR would begin to offer $2 new releases.
-By Melissa Korn, Dow Jones Newswires; 212-416-2271; email@example.com