Coinstar CEO Talks Redbox ROI11 May, 2010 By: Chris Tribbey
Renting 9 million DVDs a week, and touting a 23% market share in the DVD rental market, Redbox kiosks are paying for themselves within 24-36 months of deployment, according to Paul Davis, CEO of Redbox parent Coinstar.
Speaking at the Jefferies & Co. Global Internet, Media & Telecom Conference May 11 in New York, Davis said the nearly 25,000 Redbox kiosks currently deployed in the United States are pulling in about $50,000 by their third year in operation, more than covering the $15,000 it costs to deploy one.
“To date we’ve never retired a machine,” he said. “We really have the capacity to do 1,000 kiosks a month. That’s not to say we will.”
Davis reiterated that Coinstar estimates there’s a market for up to 60,000 DVD kiosks in America. The company has moved into a dozen airports and plans on a dozen more in the coming months, Davis said. Coinstar also is testing Blu-ray Disc and video game rentals, and is looking at testing 3D Blu-ray and digital download products, the CEO said.
Davis also added that 10% of Redbox consumers reserve their DVD ahead of time via the Internet.