NCR Corp. (NCR) is on track to install self-service BLOCKBUSTER-Express DVD Kiosks in 309 RaceTrac stores.

RaceTrac Petroleum Inc. operates a chain of gasoline stations and convenience stores across five states in the south east. As of now, NCR Corp. has installed 200 kiosks and the rest are to be installed by June.

RaceTrac customers will have 24×7 rental access at its kiosks through a credit or debit card. DVDs will be available at a rent of $1 per night and can be returned at any Blockbuster Express kiosk.

Under the partnership, RaceTrac will operate BLOCKBUSTER Express kiosks in its stores on a two-month promotional basis, from April 3 to June 5. Under the promotion plan, customers renting a movie will get discounts on refreshments and beverages.

RaceTrac is pinning its hopes on the partnership, which could attract more visitors to its gas stations. The agreement is a also a big positive for NCR Corp., since gas stations are frequented regularly. The promo offer will increase awareness of the kiosk locations. We think this should improve NCR’s revenues from the south eastern belt.

NCR Corp. originally aimed at installing 10,000 kiosks by the end of 2011, but has now raised its target by a thousand. NCR Corp. trails Coinstar Inc.’s (CSTR) Redbox brand.

As part of its attempt to capture a big share of the DVD-Kiosk market, the company is now offering DVD-vending machines to CD, DVD and video game retailers. The marketing strategy will allow NCR Corp. to free-up space in its stores by making more DVD-Kiosks accessible to customers.

We believe NCR Corp. will be able to capitalize on the growth potential in the DVD kiosk segment. As per market sources, roughly 60% of people borrowing DVDs prefer to do so through self-service kiosks.

Despite the opportunity in the DVD kiosk business, we remain somewhat cautious as this business is likely to see growing competition from online streaming. Netflix Inc. (NFLX) leads in this space, and the company’s growing success has resulted in a recent tie-up with Apple Inc. (AAPL).

Currently, NCR Corp. has a Zacks #3 Rank, which translates into a short-term Hold recommendation.

 
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