Published:
07-Oct-08
MOD Systems, a provider of digital media delivery systems for retailers, has secured $35m of funding from CE giant Toshiba and NCR corp. The investment will fund an initiative to launch a retail kiosk system that will, at launch, enable consumers to download a choice of 4,000 movies, TV shows, music or other digital content titles to Secure Digital (SD) cards and portable devices such as mobile phones. NCR, automatic-teller machine giant and technology specialist, is to distribute and maintain the system's kiosks located in retail stores, airports and quick-service restaurants. In conjunction with this initiative, Toshiba is to launch dedicated set-top boxes (STBs) for the service and develop high capacity SD cards for the system, improving download speeds. The funding from Toshiba and NCR gives the companies minority stakes in MOD Systems.
Our take...
Previously MOD Systems' involvement with video content delivery had been though the development of DVD manufacturing-on-demand solutions. In-store DVD manufacturing-on-demand installations have been rolled out as a means of extending catalogue depth but so far not beyond a trial basis. Separately, NCR has also explored the area via the purchase of a minority stake in high-tech kiosk maker e-Play.
Whilst the use of SD cards for personal content is widespread, previous attempts to market SD cards for pre-loaded commercial content, typically with music, have failed. MOD Systems' claims its approach is unique, given that its proposition hinges on a re-useable card solution and consumer selected content. Additionally, the system avoids the logistical complexities, limited content selection, pre-paid royalties, and physical retail space requirements inherent in the pre-loaded retail model. Screen Digest understands that content held on SD cards will be protected by CPRM, a hardware-based digital rights management (DRM) system, that will enable video playback in CPRM-enabled SD card devices. CPRM is a feature in an increasing number of CE products already available, particularly from Toshiba which has perused digital alternatives for standard and hi-def video content delivery since the withdrawal of its HD DVD format in February 2008. However, a large proportion of legacy devices even those featuring SD card slots may be unable to provide CPRM video playback an issue which Toshiba hopes to address with its dedicated STB. The company is developing a branding programme to advise consumers which SD reader devices are compatible.
The projected proliferation of card-reading devices should make the system accessible to a growing base of consumers from launch. However, while potentially attractive to retailers, it is unlikely that such a system will make significant inroads as a competitor to the incumbent DVD format. Moreover, the absence of hi-def content means the system fails to tap consumers looking to upgrade their home entertainment experience.
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