Article
Digital-download kiosks in store for retail, other verticals
How successful will the technology be against its online competition?
June 24, 2009
Recent years have been bleak for brick-and-mortar music retailers, and some would say that is a result of the iTunes and Netflix-led paradigm shift in how consumers obtain entertainment content.
But others counter that there are consumers who want an even different offering, one that meets them where they already are and gives them content on devices they already own. In fact, companies such as Frank Mayer & Associates, KIOSK Information Systems and NCR Corp. are banking on it. The three kiosk makers are working in partnership with entertainment companies Media Port, Mix & Burn and MOD Systems, respectively, to develop digital-download entertainment kiosks, either for placement at retail or in other verticals, such as travel and healthcare, for instance.
"We envision that they would be deployed in places where people are waiting and need access to entertainment," said Bob French, president of digital-download provider Mix & Burn. "We think that the target, the real prime opportunity is when someone is involuntarily waiting for something, either with transportation or at a hospital, for instance, and they just need something to do."
French and Mix & Burn have worked with KIOSK Information Systems to introduce the "MP3 Filling Station," a kiosk that houses more than 3 million DRM-free music tracks and is compatible with most download-ready media devices. The Frank Mayer/Media Port solution is similar, but its catalog also includes downloadable books, mobile games, ring tones, audio how-to manuals and whole movies and TV shows. NCR, Toshiba and MOD Systems are still developing their kiosk offering, but reports indicate the companies will offer digital downloading of both music and movies.
And though its actual future existence is still in question, Apple recently received a patent for an iTunes kiosk with the capability to detect compatible media devices and download music wirelessly.
The various digital-download solutions differ in some ways, but the basics are similar: All offer mostly DRM-free music tracks and can download to digital devices, SD memory cards and USB devices, and Frank Mayer and Media Port's solution even burns and dispenses CDs. Users can choose to download individual songs, whole albums or their own compilations, and the price structures are generally the same as those one would find on iTunes other online music services. Some new releases go for $1.29, while most songs are 99 cents and others even dip down to the 69-cent level.
With the Frank Mayer/Media Port and KIOSK/Mix & Burn offerings, deployers can brand the kiosk's enclosure and choose its hardware configuration — touchscreen, keyboard or a combination; whether to integrate cash acceptors; etc. Frank Mayer's solution has been installed in Greyhound stations and a number of retail locations in New Zealand and Australia, and the company says it is currently conducting tests with three major retailers in the United States. The KIOSK/Mix & Burn solution has been deployed in three trial locations.
Will people use them?
What some in the self-service and retail industries are wondering, though, is whether these kiosks are answering a question no one is asking. Why, for instance, would a consumer go out of her way to download music at the neighborhood supermarket when she can do it just as easily, more comfortably, more securely and at her convenience at home?
French says he gets that question often.
"The answer is that this service is not meant to be everyone's solution," he said. "Your well-trained, highly computer-literate young person, for the most part, does not need this service, and I'll admit that right up front. But there is a group of underserved people, the unbanked people and older people, who never really ‘got digital' and need to be served."
"It creates another channel," said Ron Bowers, senior vice president of business development for Frank Mayer and Associates. "With the woes that the music industry has had, the opportunity for allowing the consumer to purchase products when they want to, the way they want to is really the strength behind this solution."
But not everyone is so optimistic.
"There will always be people who aren't technologically savvy and will be slower to adapt to the new technology," said Francie Mendelsohn, president of industry consultancy Summit Research Associates Inc. "But going forward, that's just not where the growth is going to be."
Mendelsohn does say, however, that she could see such technology being successful in airports, especially if coupled with electronics-vending kiosks, such as those from Zoom Systems Inc. and Best Buy.
"What's an iPod with no content? It serves no purpose," she said. "But if you actually would be able to add the content, that would make a lot of sense."
Thus far, the Frank Mayer/Media Port and KIOSK/Mix & Burn solutions are only deployed in the United States on a trial basis, and the NCR/Toshiba/MOD Systems kiosk is still in development.
Bryan Heathman, marketing consultant and author of "Conversion Marketing," says there are three very important factors in the success of digital-download technology at retail:
1. Placing the kiosks in locations where the target audience has discretionary time. 2. Clearly knowing the target audience and which of these locations they frequent. 3. Delivering content in a multifaceted manner – USB, wireless, discs.
Frank Mayer and Bowers think the biggest key to the success of digital-download kiosks is simple: variety.
"This is a new channel opportunity, a new way to allow customers to purchase the way that they want to purchase, when they want to purchase," Bowers said. "It's not going to take the place of and put other solutions out of business, it's just going to add more opportunity for the consumer."
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