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-   -   Redbox Analyst Day - 38.6 M users +17.6% YoY 38,000 kiosks, more Blu-ray & movie tix? (https://forums.highdefdigest.com/high-definition-smackdown/125174-redbox-analyst-day-38-6-m-users-17-6%25-yoy-38-000-kiosks-more-blu-ray-movie-tix.html)

Kosty 05-17-2012 03:03 PM

Redbox Analyst Day - 38.6 M users +17.6% YoY 38,000 kiosks, more Blu-ray & movie tix?
 
Quote:

Redbox Eying Movie Ticket Sales?

17 May, 2012
By: Erik Gruenwedel

http://www.homemediamagazine.com/fil...edboxKiosk.jpg

Kiosk vendor adding 2,400 combined locations at CVS, Dollar General, Family Dollar convenience stores in 2012, including 35% locations with dual kiosks

Redbox could include movie tickets as it ups entertainment offerings (including expanded Blu-ray Disc title selections) at its national footprint of more than 38,000 rental kiosks, according to Wedbush Securities analyst Michael Pachter.

Pachter concluded as much following Redbox parent Coinstar’s May 16 analyst day where Gregg Kaplan, president and COO of Redbox, outlined four growth areas he believes the kiosk business is dependent upon: new business (movie tickets?), digital strategy with Verizon, assimilation of Blockbuster Express locations and expansion into Canada.

Though much of the presentation previously was disclosed May 9 by Coinstar CFO Scott Di Valerio at a separate investor event, it underscored the fact that Redbox believes the kiosk rental business has significant growth opportunities ahead.

“We believe that Coinstar intends to sell movie tickets through Redbox kiosks, helping its studio partners to drive higher-margin theatrical exhibition sales, while driving awareness of films that will ultimately come to [disc],” Pachter wrote in a May 17 note.

While the analyst day presentation provided scant new specifics regarding the February-announced digital joint venture with Verizon, Redbox disclosed it would get 35% of the net profit in the partnership, including being paid a fee for each disc rental generated by the subscription program.

An exact launch date of the subscription program, including pricing and content selection, was not revealed, although Coinstar expects the joint venture to be unprofitable in the near term as it ramps up operations.

“We are encouraged that Coinstar limited its exposure by requiring the [joint venture] to pay it for [discs] rented, suggesting that the company will not lose money over the long run,” Pachter wrote.

Redbox believes there are up to 2,500 kiosk locations in Canada, including Walmart Canada and Couche-Tard convenience stores. It says Canada represents the third-largest disc rental market in the world, with $23.09 in annual movie rental spending per capita, compared with $19.82 per capita movie rental spending in the United States.

At a separate investor event, Verizon CFO Fran Shammo said the appeal of Redbox to the digital joint venture was its expansive customer base and robust website — the latter attracting 11.3 million unique visitors monthly.

“It is really meant for launch across the U.S. for the Redbox population and its 30 million customers,” Shammo told investors at the 40th annual J.P. Morgan Global Technology, Media and Telecom confab in Boston. “We are going to integrate all that together and bring packages for both streaming and DVD.

Indeed, Redbox had 38.6 million customers in the first quarter (ended March 31), up 5.8 million users (17.6%) from 32.8 million users during the same period in 2011.

Redbox said it saw a 5% increase in first-quarter Friday night rentals following promotional enhancements to the website and targeted emails to its 22 million registered users. Redbox claims to have 39 million customer email addresses.


With closure of Redbox’s $100 million acquisition of Blockbuster Express business from NCR Corp. occurring next month, Pachter expects the kiosk vendor to install 5,000 Redbox units in the previous 10,000 Express locations. Notable Express locations include Safeway, Food Lion and Publix. Meanwhile, Redbox and Express kiosks apparently are incompatible — a reality Di Valerio hinted at when he said many of the Express kiosks might be repurposed for expansion opportunities in Europe.

Redbox suggested assimilation of the Express business would initially be dilutive — representing a possible negative hit to forward guidance, according to B. Riley & Co. analyst Eric Wold.

“We are still positive on the acquisition and believe it will generate a boost to profitability in 2013, brings key retail partners into the fold and provides kiosks that can be used to seed international markets,” Wold wrote in a May 17 note.


http://www.homemediamagazine.com/red...et-sales-27284

Kosty 05-17-2012 03:03 PM

Quote:

Verizon CFO: Joint Venture Covets Redbox’s 30+ Million Users

17 May, 2012
By: Erik Gruenwedel

http://www.homemediamagazine.com/fil...83/Verizon.jpg

With Redbox and Verizon set to launch their joint streaming business (which includes rental discs) by August, Verizon CFO Fran Shammo told an investor group the telecom’s goal is attracting the kiosk vendor’s more than 30 million users.

Speaking May 16 at the 40th annual J.P. Morgan Global Technology, Media and Telecom confab in Boston, Shammo said the joint-venture enables Verizon to showcase its proprietary digital content distribution platform (Verizon Digital Media Services) beyond its fiber-optic FiOS TV subscriber base of 4 million to a wider audience.

Announced in February, the streaming program (integrated with kiosk disc rentals) will launch in late summer.

Shammo said VDMS is a superior online video supply chain to traditional CDM platforms used by Netflix and Hulu, among others. Getting the word out was the challenge. Enter Redbox.

“We … needed a partner who is recognized outside of the FiOS footprint as a very, very good, if you will, DVD distributor, but wants to get into the streaming business,” he said. “Redbox fits that naturally for us.”


The CFO said the Redbox partnership would also target Verizon’s FiOS TV subscribers — but not wireless subs.

“It has nothing to do with wireless,” Shammo said. “It is really meant for launch across the U.S. for the Redbox population and its 30 million customers. We are going to integrate all that together and bring packages for both streaming and DVD.”

Meanwhile, Verizon Wireless is transitioning subscribers away from unlimited data plans to a tiered data-share program it will launch this summer. Shammo said the current base of 3G subscribers will slowly migrate to Verizon’s faster 4G LTE platform necessitating sign-ups for the new data-share plan.

The wireless carrier had offered new subs an unlimited data plan for $30 a month until last July. Existing subs could keep the $30 monthly fee unless they upgraded to 4G.

“As they start to migrate toward 4G, they will have to come off unlimited and go onto the data share plan,” he said. “And that’s beneficial for us, obviously, for many reasons. As you pick what tier you want to be in, we think there will be some price-up in those tiers. [This] is really where we will get the revenue accretion in the future.”



http://www.homemediamagazine.com/dig...on-users-27283

Kosty 05-17-2012 06:40 PM

Quote:

Kiosk vendor adding 2,400 combined locations at CVS, Dollar General, Family Dollar convenience stores in 2012, including 35% locations with dual kiosks

Redbox could include movie tickets as it ups entertainment offerings (including expanded Blu-ray Disc title selections) at its national footprint of more than 38,000 rental kiosks, according to Wedbush Securities analyst Michael Pachter.

Quote:

“We are going to integrate all that together and bring packages for both streaming and DVD.”

Indeed, Redbox had 38.6 million customers in the first quarter (ended March 31), up 5.8 million users (17.6%) from 32.8 million users during the same period in 2011.

Redbox said it saw a 5% increase in first-quarter Friday night rentals following promotional enhancements to the website and targeted emails to its 22 million registered users. Redbox claims to have 39 million customer email addresses.

With closure of Redbox’s $100 million acquisition of Blockbuster Express business from NCR Corp. occurring next month, Pachter expects the kiosk vendor to install 5,000 Redbox units in the previous 10,000 Express locations. Notable Express locations include Safeway, Food Lion and Publix.
Streaming along with physical rentals is their eventual future but disc rentals ain't dead yet.

+17.6% YoY, 38.6 M customers, 38,000 existing + 2,400 grocery + 5,000 Blockbuster location kiosks = 45,000+ rental kiosk locations soon.

Guess that's where a lot of the Netflix Disc by Mail customers went.

That would include me.

I now rent all my Blu-ray Disc movies from Redbox, buy Blu-ray Discs on sale at Amazon Best Buy Target and Walmart and use Dish Network and OTA HD for news and sports and Netflix streaming for TV shows.

I spend less on cable and sat now and put that money into buying Blu-ray Discs on sale. What's not on sale that's newer I can rent Blu-ray at Redbox for $1.50 or less with a coupon. I use Netflix streaming also to preview Blu-ray movies I may want to buy or to watch stuff not out on Blu-ray yet or still not on sale.

Kosty 05-17-2012 06:41 PM

Obviously as Redbox expands and keeps growing physical disc rentals Blu-ray Disc will be more and more of their physical inventory over time.

But the larger point is Redbox is having continued success with physical disc rental and its growing in its kiosk footprint and DVD and Blu-ray Disc rental units and revenues over time.

Even as they add these new initiatives their physical disc rental business is increasing and that's why they are attractive to Verizon and the theater partners at all.

Kosty 05-17-2012 06:41 PM

This and the HMM article is the only see I see on the web on this subject.

Quote:

Is Redbox Preparing To Sell Movie Tickets At Its Disc Rental Kiosks?

By DAVID LIEBERMAN, Executive Editor | Thursday May 17, 2012 @ 8:40am EDT
Tags: Coinstar, Redbox


http://www-deadline-com.vimg.net/wp-...31-200x234.jpg
COMMENTS (0)
Wedbush Securities’ Michael Pachter thinks so after attending Redbox parent company Coinstar’s briefing yesterday for Wall Street analysts. Although the company only referred cryptically to its plan for a “new Redbox venture,” Pachter says this morning he believes that Coinstar “intends to sell movie tickets through its Redbox kiosks, helping its studio partners to drive higher-margin theatrical exhibition sales, while driving awareness of films that will ultimately come to DVD.” The company said in its presentation that it plans a market test for its “first Redbox new business concept” this year. The company has about 37,000 kiosks in 30,000 locations. Execs also offered a few details about their broadband venture with Verizon, on track to launch in the second half of this year. No word on pricing, but Pachter says “it appeared to us from the context of the discussion” that the subscription offer “will allow for unlimited streaming and limited DVD rentals at Redbox kiosks.” In addition to the talk about Redbox, Coinstar execs said they plan to sharply increase the number of kiosks that sell coffee, consumer electronics, beauty products, and prepared foods. In addition, Coinstar’s rolling out photo booths, and machines that enable consumers to get cash for their unused gift cards and used cell phones.
http://www.deadline.com/2012/05/is-r...rental-kiosks/

Kosty 05-17-2012 06:42 PM

Quote:

REDBOX PLANS TO SELL MOVIE TICKETS AT KIOSKS

by: Melissa Molina 3 hours ago

http://screencrush.com/files/2012/05/redbox.jpg
Justin Sullivan, Getty Images

We live in a world where at times it’s a little more difficult for people to go to the movies. The general appeal isn’t as strong anymore, especially with the advent of HDTVs and digital rentals. How can you win over movie-goers in this digital age? Well Redbox has a plan which integrates their tried-and-true rental system with getting more people in the theaters.

Redbox is that one kiosk you can’t ignore when you walk past it. It’s literally a huge red box that’s constantly playing movie trailers whenever you walk by it. It managed to obliterate Blockbuster, the once reigning king of video rentals, and now is sitting comfortably at the top. But now Michael Pachter, head of Wedbush Securities, sister company of Coinstar which owns Redbox, knows that they’re moving forward with a different strategy.

Deadline reports that Redbox is looking to launch a new “business concept,” meaning that they’re planning to sell movie tickets through their kiosks along with video rentals. Basically Redbox is looking to lend a helping hand to the studio system which is still in some ways struggling thanks to the new wave of digital technology and lack of appeal to head to the movies.

This isn’t entirely a strange move, given the fact that a variety of distributors have been thinking of different ways to give out tickets for decades. They’ve given out discounts attached to their latest DVD releases, so something of this magnitude isn’t too surprising. Actually, this is a really smart move that may gradually help ticket sales. They’re already testing out the market this year with this new concept, here’s hoping it lifts off.
http://screencrush.com/redbox-sell-movie-tickets/

Kosty 05-17-2012 06:42 PM

I think the concept of Redbox selling movie tickets (especially at a slight discount for pre paying) is a smart one that only reinforces the benefits and traffic counts of consumer going to their physical kiosks and website.

Plus adding in the Verizon partnered streaming services with joint promotions and marketing.

Redbox DVD and Blu-ray physical disc rental is going to continue to grow and gain from Netflix disc by mail losses and as their physical footprint increases to over 40,000 locations in North America.

Sounds like a reasonable plan to me for them to grow in the future.

Kosty 05-17-2012 08:49 PM

Its tough to ignore the obvious significance of some of the other details such as Redbox's expansion of its physical footprint to 40,000+ locations, its substantial YoY gains in DVD and Blu-ray rental (probably helped by migration from Netflix disc by mail users) and the significance of the continued growth of Redbox driven by discounted physical disc rentals that make it such a lucrative potential partner for those other expansions.

Redbox is still having success and is growing in the physical disc rental business for both DVD and Blu-ray and that business is not going away anytime soon.

+17.6% YoY growth, 40,000+ locations and 38.6 M customers doing physical disc rental is something hard to ignore.

Quote:

...underscored the fact that Redbox believes the kiosk rental business has significant growth opportunities ahead.
Quote:

At a separate investor event, Verizon CFO Fran Shammo said the appeal of Redbox to the digital joint venture was its expansive customer base and robust website — the latter attracting 11.3 million unique visitors monthly.

“It is really meant for launch across the U.S. for the Redbox population and its 30 million customers,” Shammo told investors at the 40th annual J.P. Morgan Global Technology, Media and Telecom confab in Boston. “We are going to integrate all that together and bring packages for both streaming and DVD.”
Quote:

Originally Posted by Kosty
Streaming along with physical rentals is their eventual future but disc rentals ain't dead yet.

+17.6% YoY, 38.6 M customers, 38,000 existing + 2,400 grocery + 5,000 Blockbuster location kiosks = 45,000+ rental kiosk locations soon.



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