Mitch Lowe Departs Redbox

21 Jul, 2011 By: Erik Gruenwedel

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Netflix co-founder will remain until successor is found

Coinstar Inc. July 21 said Mitch Lowe, president of its Redbox kiosk business, has resigned.

Lowe, who helped co-found Netflix before joining Redbox in 2003, is leaving to pursue “entrepreneurial and other interests,” according to a company statement. He will remain until a successor is found.

"I feel very fortunate to have been part of the extraordinary Redbox team that transformed the DVD rental business, and I look forward to working closely with the company to ensure a smooth transition in the days ahead,” Lowe said.

When Lowe joined Redbox it was still owned by McDonald’s and had an install base of a few thousand kiosks. Today, Redbox has more than 31,800 kiosks located across the United States and has rented more than 1.5 billion DVDs.

Eric Wold, research director with Merriman Capital in San Francisco, said Lowe’s departure is not a blow to Redbox. Wold said Lowe has always been more of an entrepreneur than day-to-day executive.

“Redbox is well past the start-up phase,” Wold said.

The analyst said COO Gregg Kaplan, who has been with Redbox since 2005, has focused more attention recently on the kiosk business and would continue to do so going forward. He doubted Lowe’s departure had anything to do with Redbox still not having a digital platform — despite corporate assurances that one is forthcoming.

“We continue to believe that [digital distribution] has become less necessary to grow the DVD business as other competitors have taken their focus off DVDs,” Wold said.

Meanwhile, Coinstar said it would report second-quarter (ended June 30) pre-tax earnings from $97 million to $100 million on revenue of $434 million to $436 million.

Coinstar reports second-quarter fiscal results July 28.

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