Analysts See Happy New Year for Redbox27 Dec, 2012 By: Chris Tribbey
A strong fourth quarter DVD rental slate for Redbox — highlighted by the Dec. 24 availability of The Dark Knight Rises — should spill over into the New Year, and three strong Jan. 8 releases will keep momentum going for the kiosk operator, according to Eric Wold, analyst with B. Riley & Co. in Los Angeles.
Ted, Ice Age: Continental Drift and The Bourne Legacy will all be available at Redbox kiosks Jan. 8, and Wold’s initial analysis of the first quarter shows a similar number of new release titles (43 vs. 46) and domestic box office ($2.7 billion vs. $2.72 billion) as the first quarter of 2012.
“However, we believe that a stronger release slate during the last two weeks of December (with two more titles and $550 million in associated box office) will also provide an incremental boost to Q1 rental demand,” Wold wrote in a note to investors.
Wold’s positive outlook for Redbox mirrors that from Michael Pachter, analyst with Wedbush Securities in Los Angeles, who noted that there are more releases that pulled in more than $50 million at the box office available heading into the New Year compared with last year, highlighted by The Dark Knight Rises.
“We note, however, that last year the earlier two-week period had five notable releases that likely carried into the current period, including the 'Harry Potter' finale,” Pachter wrote in a note to investors.
Meanwhile, Northland Capital Markets estimates that Redbox DVD rentals were up 9.6% in December compared with November, and rentals were up 11% for the fourth quarter compared with the third quarter, according to a report in The Street.