MOD Systems Scores $35M Equity Investment from Toshiba, NCR, Others

9/25/08Follow @gthuang

Why is it still such a hassle to download movies, TV shows, and other digital content to your computer or mobile device? A local company has been trying to solve one aspect of this problem—how to do it in retail stores—and now it has scored some big partners who could make a difference. Seattle-based MOD Systems announced today that Toshiba, NCR, and other unnamed companies have agreed to invest $35 million, giving them minority stakes in MOD and setting up some interesting strategic partnerships.

MOD Systems, which was formed in 2005, makes digital-media software and a touch-screen kiosk that allows stores and retailers to sell videos and music in portable form. Customers can quickly load the digital files onto a mobile phone or memory card, or burn them onto a CD or DVD. As part of the new deal, NCR has agreed to deploy and maintain the kiosks and other self-service stations at retail stores, airports, restaurants, and other outlets. Meanwhile, Toshiba is developing secure digital memory cards for quick storage, and special set-top boxes so you can play the contents of the cards on your TV.

“Our goal of creating richer retail destinations for digital entertainment will be furthered with Toshiba and NCR as strategic partners,” said Mark Phillips, chief executive of MOD Systems, in a statement. “We are humbled and excited to have leaders in consumer electronics and self-service accelerate our vision.”

But over the years, there have been several failed attempts to deliver MP3s, eBooks, and other digital content via kiosks in stores. Whether MOD Systems’ vision will take off will depend on whether its prices and selection are better than current alternatives—and how easy the technology is for consumers to adopt. Introducing new equipment like memory cards and set-top boxes could be a tricky proposition, unless the transaction is super-fast (loading a movie in seconds, say) and the storage and playback work seamlessly.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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