Redbox CFO: Smaller Box Office Movies Rent Better23 May, 2013 By: Chris Tribbey
With Iron Man 3, Star Trek Into Darkness, Fast & Furious 6, Man of Steel, Despicable Me 2 and Monsters University, it’s shaping up to be a big summer box office.
And that worries Galen Smith, CFO of Redbox parent Coinstar.
“What you’ve seen is the studios move to fewer but bigger blockbusters,” he said, speaking May 22 at the B. Riley & Co. Investor Conference. “I’d much rather have a lot of movies in that $50 [million] to $100 million range, than a lot of blockbusters in the $200 [million], $300 million range.”
The reason? The monster summer blockbusters are more likely to be purchased by consumers on DVD and Blu-ray Disc, while the more moderate moneymaking movies rent better.
“Rental is that $50 million, $100 million sweet spot,” Smith said.
Smith also touched on the status of Redbox Instant by Verizon, the new streaming service that pairs unlimited online viewing with DVD or Blu-ray rentals at kiosks. Smith said that more and more subscribers are joining as the service spreads to more consumer electronics.
LG Electronics’ latest connected HDTVs, Xbox 360, Apple devices and Samsung Blu-ray Disc players among other consumers electronics to carry the service. Google TV, Vizio and Roku are next.
“As you make it easier for consumers to access that streaming content, it makes it a more valuable service,” Smith said.
Redbox Instant offers unlimited streaming of content from Warner, Lionsgate, MGM and Paramount, as well as electronic sellthrough and transactional VOD options for new releases on street date from NBC Universal, Paramount, Lionsgate, Relativity and Sony Pictures.