An ATM for Videos : Marketing: The 24-hour, self-service tape kiosk is said to be faster and more convenient than renting from a store.
From the outside, it looks like a little shack plopped in the Harbor Shopping Center parking lot. But on closer inspection the shack becomes the latest gimmick in the vending industry--the self-service video rental machine.
It is called Videomatic, a larger-size version of the video vending machines that are popping up in supermarkets and other locales. It represents the marriage of a computer that works like an automatic teller machine and a robot that retrieves video cartridges and drops them in a slot for the customer.
The resultant kiosk operation is faster than renting a video from a store, says the company that sells Videomatic franchises. And insomniacs may find it especially appealing.
“One of the things we’re doing is selling convenience,” said Fred DiGiorgio, chairman of Videomatic International Inc. in Ontario. “We’re open 24 hours a day.”
He said the company has 23 Videomatic installations around the country and has sold another 50 franchises. An Orange County kiosk was previously tested nearby on Newport Boulevard, but vehicle access was too difficult so it was moved to Harbor Boulevard. Another Videomatic outlet is scheduled to debut in Yorba Linda.
While in a high-visibility location, the new Videomatic store is not without its competition. It is sandwiched within a few hundred feet of Music Plus and Wherehouse stores, both powerhouses in the video rental business.
But franchisees Bob and Sandy Haig say they are confident that their little self-service outlet can take on the big guys.
While major video stores might have larger inventories, Videomatic has tried to offer more new releases that are in demand among renters, Bob Haig said. Also, video renters can stop by Videomatic and order a video within minutes, instead of having to wade through long aisles and wait in lines at a checkout counter.
Videomatic prices are similar to its competitors--$2.49 for an overnight rental.
Haig said he expects to spend about 15 hours each week maintaining his $150,000 franchise while continuing his job as an assistant vice president for a Santa Ana computer systems firm.
“I’ve always wanted to go into business for myself,” he said. “I want to keep my job. I can do this, too.”
The Videomatic system is simple enough that no attendant is needed. A customer searches among the display cabinets for a desired movie. A video screen displays all the outlet’s titles and their corresponding numbers to let customers know whether they are available.
Then the customer runs a major credit card through a slot on the computer and punches in the numbers of the videos. A mechanized sorter finds the correct video among up to 1,200 in stock and drops it in the delivery slot. A returned video is logged using the same computer, and the tape is returned to stock immediately so it is ready for the next customer.
“So many people are used to ATMs nowadays. This is just the next step,” said Haig, who can keep track of transactions as they occur from a home computer.
So far, Haig said, few customers have tried Videomatic since it opened Oct. 16. But he said he has been correcting little problems--troublesome electric lines and such--in preparation for a marketing push next month that will include delivery of 15,000 flyers to surrounding neighborhoods.
For the vending machine industry, Videomatic represents a breakthrough of sorts. Until now, vending machines have been used mostly to dispense low-priced items because they are typically coin operated. And being refrigerator-size, they could only dispense small things.
“Not many things are small enough to put in a vending machine that cost less than a dollar,” said David Stone, spokesman for the National Automatic Merchandising Assn., based in Chicago.
Videomatic, because of its increased size and credit card capability, brings a new twist to vending. The new technology has led to some new ideas. The French have even tried vending blue jeans.
The idea of renting videocassettes through machines is not new, but “there is not a lot out there,” Stone said.
