Franchise Entertainment Group (FEG) has invested $2 million to order 1,000 kiosks, which if deployed quickly, would make the group the biggest kiosk player in the Australian market.
According to The Australian, Paul Uniacke, FEG managing director , said there were 400 kiosks already in the market, most of them operated by RedRoom DVD or the Hoyts-owned Oovie brand.
"These boxes have disrupted the model in the US, where it's $1-a-night rental," Uniacke said in the interview. "We're looking to get to 3,000 within three years. I'm looking to own the market within a two-year period."
The move into kiosks is a strategic about-face for FEG, whose franchisees run hundreds of bricks-and-mortar stores that typically rent new-release videos at almost double the $2.95 charged by kiosk operators. The first kiosk will be up within 90 days.
Uniacke said franchisees could reduce the impact by carefully selecting kiosk locations, reducing store opening hours, closing during public holidays or closing the machines during the day.
"We're throwing out the rule book on kiosks,"he said.
"If a franchisee says 'I don't want it' and someone else puts one there, then what are you going to do?"
