DVDPlay Debuts First U.S. Automated Entertainment Machine (AEM)

Turning the boom in DVD player sales into a new income opportunity for franchisers, a Silicon Valley company called DVDPlay today launched the nation's first equivalent of an ATM for the entertainment industry. Automated Entertainment Machines, or AEMs, enable franchisers to rent or sell DVDs and run TV spot advertising and movie trailers through strategically positioned stand-alone machines in high-traffic locations such as Fast Food restaurants, drug stores, convenient stores and universities. The AEM's debut comes as DVD players are outselling all other home electronic devices. Industry observers estimate the number of DVD-ready households in the United States, already at 50 percent today, will reach 80 percent within three years.

Described as "the big red machine with the small footprint," an AEM looks and functions like a bank's ATM, while offering the instant gratification of on-the-spot DVD access at a favorite coffee house or without an extra stop on a shopping trip. Unlike standard movie rental stores, AEMs are open 24/7. Unlike online movie rental services, there's no wait. Additionally, users will be able to access any machine from their home or office PC to check availability and reserve the movie to be picked up later.

"We expect the adoption of AEMs to accelerate quickly and one day be on a par with now ubiquitous ATMs," said Dee Cravens, executive vice-president and chief marketing officer of DVDPlay. "Industry analysts estimate that DVD worldwide sales and rental revenues will continue to grow exponentially, doubling to $40 billion by 2007. These numbers may surprise potential franchisees and other entrepreneurs looking for safe, new investment opportunities in an unsettled economy."

In contrast to other tech sectors, DVD rentals offer a sweet spot:

• DVD rentals will grow at a rate of 115% anually.
• In 2001 and 2002, DVD players outsold all other home electronic devices.
• 50% o households own a DVD player today, estimated 80% i three years.
• 80% o PCs will be DVD enabled by 2005.

How The Franchise Works: Money Matters

DVDPlay generates revenue for Franchises in three important ways: rental fees, late fees and DVD sales revenue. Rental fees are created every time a customer uses an AEM to rent a DVD. Late fees are based on the terms set for the rental agreement. Typically, late fees accrue on an estimated 15% o all rentals, providing a significant source of additional revenue every month. Some consumers prefer to purchase the DVD outright which gives the franchisee another easy way to bring in extra revenue. Finally, franchisees can add advertising on the machine's large flat panel screen, email promotions and membership loyalty programs as additional revenue streams.

Each U.S. Area of Dominant Influence (ADI) will have one or more designated franchiser depending on the number of households and the territory desired; Franchisees will be able to place numerous machines within a given city or territory. Unlike other franchise opportunities, this means that there will be no local competition to compete for customers. Franchisees who sign up early will have the advantage of the most desirable U.S. markets.

Customer Support

DVDPlay offers customer support, designed to help new franchisees get started with every aspect of the business. This includes things such as onsite training, in field sales assistance, installation, maintenance and operating manuals. Furthermore, all franchisees are supported 24/7 via a personal, secure and safe administrative site.

How It Works: The AEM

DVDPlay AEMs are complete, stand-alone intelligent machines, compact in size and connected via the Internet. They are capable of dispensing, receiving, renting and selling DVDs, CDs and DVD games. The machines are easy to use and require point of purchase payment in the form of a credit.

The first step is to select a DVD by following a friendly touch-screen menu, swipe a credit card for payment and leave an email address to receive special discounts and promotions in the future. Returns are simple; customers press one button on the touch screen and slip their DVD into the designated slot. DVDPlay automatically restocks the DVD so it's ready for the next customer. If customers forget to return DVDs on time, the machine automatically adds late charges to their transactions and notifies the customer via email. All receipts are instantly sent by email.

Pilot Programs

DVDPlay's AEMS are being tested in four states --New York, North Carolina, Texas and California. For example, Duane Reed drug stores in Manhattan and The Pantry in North Carolina are currently testing AEMs under development agreements with Video Vending New York, Inc. with promising results. Additional AEMs will be rolled out nationwide when DVDPlay finalizes its Franchising agreements.

Franchisees Contact Info

Interested entrepreneurs and franchisees should contact DVDPlay's sales department to discuss financing options. Contact: Don Webb, vice-president of franchise sales, 408.395.1727 Ext. 106, email: dwebb@dvdplay.net or to learn more about DVDPlay (www.dvdplay.net).

About DVDPlay

DVDPlay is the manufacturer and franchiser of Automated Entertainment Machines (AEMs) that enable consumers to conveniently rent or purchase DVD movies wherever they shop, work or play and franchise owners to manage their AEMs remotely 24/7. AEMs are Internet connected, small footprint, touch screen and credit card enabled.