Digiboo delivers movie kiosks at the mall

Movies are widely available to rent or buy via the Internet, DVDs or premium cable channels, but a new source -- video kiosks -- is growing in the Twin Cities.

In an interview with the Star Tribune, an official with a California company called Digiboo said it is introducing movie downloads to tablets Thursday in what it considers a major milestone that accelerates its unique strategy of using kiosks to electronically distribute movies.

Digiboo, a 20-employee firm, in March began offering movies to laptop PC owners about to board planes at Minneapolis-St. Paul airport. Digiboo's electronic kiosks will now offer movies and TV shows for tablet computers and smartphones that use the Android operating system. (Compatibility with Apple's iPad and iPhone still lies in the future.)

In addition, the firm has moved beyond the airport to put kiosks in the Southdale and Maplewood shopping malls.

Analysts say Digiboo's ability to provide movies to tablet computer customers is key to its success. Tablets, which made technology simple for ordinary people, disrupted personal computer sales and made a fortune for Apple, are widely used for watching video.

"Watching video on a high-quality tablet is a really good viewing experience," said Bill Niemeyer, an analyst at the Diffusion Group, a consumer technology research firm in Frisco, Texas. His firm's studies show that about 89 percent of tablet owners watch video ranging from YouTube clips to movies.

Blake Thomas, chief marketing officer of Digiboo, agreed.

"In order to really fit into the lifestyle of portable movie watching, we must support tablet computers," Thomas said in an interview.

Digiboo was started by three former MGM home video executives. Actor Morgan Freeman was an early investor through his firm Revelations Entertainment. The start-up reached distribution deals with Hollywood movie studios, which are notoriously protective of their intellectual property. Digiboo currently has distribution deals with Warner Bros., Sony, Paramount and Lions Gate studios, and predicted it will sign with another undisclosed movie company later this month.

Analyst Niemeyer praised Digiboo's mall strategy.

"Digiboo recognizes that if all they do is serve travelers, they might be profitable, but it would be a small market. They have to try to extend the service out to the rest of the world."

Lauren Carpenter, Southdale's director of marketing and business development, said the Digiboo kiosk has been in the mall for about seven months, and is the only Southdale retail outlet that rents or sells movies. It's located in a high-traffic area in the mall's central court.

Besides being in more locations, the Digiboo movie kiosks have become more advanced. They are now Wi-Fi hot spots for downloading movies to tablet computers and smartphones. Laptop computer users can choose between Wi-Fi or getting the movies the original way, recorded on a USB flash drive. The software needed to play the Digiboo video on any of the devices can be downloaded from the kiosk.

Digiboo, privately owned, does not disclose its revenue or profit from the movie kiosks. But Thomas said the firm has downloaded more than 12,000 movies to customers since March, when the Twin Cities airport was one of three initial markets for the kiosk service, along with airports in Seattle and Portland, Ore.

Digiboo now has a total of 35 kiosks at the three airports (about a dozen are at Minneapolis St. Paul airport), and another five at non-airport retail locations, including the two Twin Cities malls and some coffee shops in other cities, such as Los Angeles, Thomas said.

The digital movie rentals, available only in standard definition, are $3.99, and movies can be purchased for $14.99. TV episodes of shows such as "Boss," "Mad Men," "Nurse Jackie" and "The Big Bang Theory" can be purchased for $1.99, but not rented. Each kiosk has 800 movies and 11 TV shows, and the roster is updated weekly, Digiboo said.

Wi-Fi downloads take four to 10 minutes, Thomas said. Flash drive downloads take from 30 seconds to five minutes. Rental customers have 30 days to watch a movie, and, once started, a movie must be watched within 48 hours.

Digiboo is still working on an app that will allow it to download movies to the Apple iPad operating system, called "iOS." However, it already can serve the 48 percent of the tablet market that uses the Android operating system from Google. The only Android device that can't play Digiboo video is the Barnes & Noble Nook tablet, which uses a customized version of the Android operating system, Thomas said.

"Digiboo will increase its user base enormously by serving Android devices," Thomas said. "Compared to the laptop market we now have, I think we'll be roughly doubling our user base."

Steve Alexander • 612-673-4553