Redbox Revenue Up 34%28 Jul, 2011 By: Chris Tribbey
Revenue for kiosk operator Redbox was up 33.8% to $363.9 million for the second quarter of 2011, giving parent company Coinstar a profit of $26.7 million for the three months ended June 30.
Coinstar saw its quarterly profit nearly double over the $13.4 million it earned in the second quarter of 2010, while Redbox saw its estimated DVD rental market share balloon to 34.5%, up from 25.1% this time in 2010.
Redbox also announced it had passed the 1.5 billion mark for DVD and Blu-ray Disc rentals, and the 4 million mark for video game rentals. Compared to the second quarter of 2010, Redbox kiosks rented 16.6% more titles, on a same-kiosk basis.
“More than 1.5 billion movie rentals and the positive consumer reaction to video games highlight the ongoing demand for physical media,” said Redbox president Mitch Lowe, who announced July 21 that he was leaving the company. Lowe will stay with the company while it searches for a replacement.
Redbox also announced it will expand its video game rentals to an additional 5,000 kiosks nationwide starting Aug. 1, bringing the total number of kiosks offering PlayStation 3, Xbox 360 and Wii games to 27,000.
During the quarter, new-release titles not embargoed by studios performed up to the company’s expectations, with Paramount Home Entertainment’s True Grit the notable exception, according to Coinstar CFO Scott Di Valerio.
Blu-rays currently account for up to 4% of available discs in Redbox kiosks, the company said. The goal is to have that number at 6% by the end of the year, Di Valerio said during a conference call with investors.
The company still plans to roll out a digital offering this year, though Coinstar CEO Paul Davis admitted negotiations with potential partners have taken “longer than expected.”
As for the rest of 2011, Coinstar upped its full-year revenue expectations to between $1.76 billion and $1.85 billion, with earnings per share at between $2.90 and $3.15. The fourth quarter should prove exceptionally profitable for Redbox, executives said, with 36 titles earning a combined $3 billion-plus at the box office available at the kiosks.
“We had a very solid quarter delivering strong top- and bottom-line results,” said Coinstar CEO Paul Davis. “We are pleased to have won the Safeway Coin business and are excited about the continued market share gains we're enjoying with Redbox. The video game rollout has started nicely as we’ve been able to broaden our demographic reach and provide consumers access to games at affordable prices.”
Overall revenue for Coinstar for the quarter was $435.2 million, up 27% from the same quarter in 2010.