Niagara's Spotbox offer movies in a machine By JOHN LAW, NIAGARA FALLS REVIEW Updated 23 hours ago
NIAGARA - Blockbuster stores across Canada will be closing soon, but Niagara Falls entrepreneur Pat Cortese isn't ready to give up on DVDs just yet.
In fact, he wants to offer them as easily as you'd buy a Coke from a vending machine. No store, no staff, just a kiosk with all the new releases for $2 each.
The result is Spotbox, a bright orange and white machine at two locations in Niagara Falls so far. Cortese has plans for eight more throughout the region within six months, but for now he's waiting for the idea to catch on.
Like it has in the U.S. Big time.
Known as Redbox south of the border, the kiosks have proven to be massively popular since they first started popping up in 2004. Frequently located outside restaurants and convenience stores, the McDonald's-funded machines rented DVDs, Blu-rays and video games for $1 apiece overnight. Now solely owned by Coinstar, the company operates more than 27,000 kiosks across the country.
But not, Cortese notes, in Canada. He's getting the jump before they arrive.
"Thirty percent of the (home video) marketplace is still rental," he says. "The problem is, people aren't willing to pay $6 to rent something."
It's a concept that has scored big for Redbox. Each unit in the U.S. averages about 50 rentals per day, and generates nearly $40,000 in revenue per year.
Since Spotbox first appeared at the end of August, it has averaged about five rentals per day, says Cortese. He expects that to pick up dramatically, in light of Blockbuster shutting its doors soon.
"It's more about people just learning to accept it," he says. "After they've walked by it five times, their curiosity gets the best of them and they want to try it.
"(After Blockbuster) there's going to be a void in the marketplace."
Trying it turns out to be a cinch. Customers can peruse new releases or choose a category to search for a specific title. Once they've decided, they insert their credit card, enter their postal code to validate, then retrieve their disc from the same slot they'll return it.
Each disc comes in an orange slim box.
The machines currently have about 250 titles each. They have capacity for 1,400.
The city's two kiosks are located at the No Frills plaza on Lundy's Lane, and Dawn's Convenience at Lundy's Lane and Montrose Rd.
The units are located outdoors and have built-in heaters to handle winter.
At the No Frills location, tourist Lunnie Harris of Cincinnati says everyone in the U.S. has heard of Redbox.
Shaking Cortese's hand, he pointed at Spotbox and said "this'll be a million bucks."
Cortese says the DVD format still has at least ten years of life before downloading becomes the dominant way to view movies. Preparing for the future, each Spotbox (price tag: between $15,000 to $20,000) has a built-in flash drive.
He also realizes graffiti and vandalism are "part of the business" when operating any sort of vending machine.
"There's no hotel or restaurant in the world that hasn't been vandalized," he says. "I don't have to really deal with theft … unless they steal the whole machine!"
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