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Unread April 6th, 2009, 11:28 AM
JoePesci JoePesci is offline
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No Guarantees for Red-Hot DVD Machine

No Guarantees for Red-Hot DVD Machine

http://online.wsj.com/article/SB123897862892891315.html

"Few would argue that Redbox's $1-a-night DVD offering is a bargain. The same can't be said about the stock of Redbox's parent, Coinstar.

Lifted by surging sales at the DVD vending-machine service, Coinstar's stock has doubled since December. It's trading at the eye-popping multiple of 44 times estimated 2009 earnings. Netflix, another hot DVD stock, is at 27 times.

Enthusiasm about Coinstar is understandable. The DVD-kiosk market grew to nearly 6% of the $8.2 billion movie-disk rental business last year from 1% in 2006, estimates Adams Media Research. It puts kiosks at 17% of the market by 2013.

Coinstar, which dominates the market with Redbox and DVDXpress, saw sales at DVD machines installed at least a year leap 52% last year. It plans to increase Redbox's installations by about half this year.

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Redbox's vending machines
Associated Press

Redbox's vending machines are getting an increased share of the DVD-rental business.
Redbox's vending machines
Redbox's vending machines

Rapid growth holds risks. Increased penetration will eventually cannibalize sales at older machines. That happened at Coinstar's coin-counting service last year, when revenue at machines installed more than a year fell after a ramp-up in installations.

A bigger worry relates to Redbox's practice of recouping some of its content costs by reselling used DVDs. Coinstar noted recently that resale prices had declined, a softening that could worsen as Redbox's used inventory grows. Then there's competition: Blockbuster plans to roll out DVD vending machines.

What's more, Redbox is in litigation with a major Hollywood studio, Universal, casting doubt on Redbox's ability to maintain a supply of product at competitive prices. At current valuations, investors should pause before putting cash into Coinstar."

Write to Martin Peers at martin.peers@wsj.com
  #2  
Unread April 6th, 2009, 05:35 PM
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sar94pga sar94pga is offline
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i like to watch the people at the redbox. struggle with the credit cards, and try to figure out what they want to watch out of the very limited selection. then just get pissed off and walk away.
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  #3  
Unread April 6th, 2009, 07:36 PM
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both redboxes near our store are down half the time. people get sucked into the idea of $1 rental, find the machine is down, and then they REALLY want to rent movies since they got up and bothered, and what do you know? they come in and suddenly we have a pile of 19 new member apps completed by 9pm.
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  #4  
Unread April 7th, 2009, 05:28 AM
Ghost of AtlanticVamp Ghost of AtlanticVamp is offline
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In my town, RedBox keeps adding these machines and it's pretty ridiculous how much penetration they have in specific locations. There's one at the Walgreen's, the McDonald's next door, and the grocery store across the street. Then, less than three miles away, there's another one at the McDonald's there. There is such a thing as overkill, you know!

Plus, whoever is installing them here is putting them in dangerous locations, like in a dark inset beside the entrance of the grocery store, the unlit alley beside the drug store, and because of how the kiosks are set up, they all create a huge blind spot if they are in front of a window.

Quote:
Originally Posted by sar94pga
i like to watch the people at the redbox. struggle with the credit cards, and try to figure out what they want to watch out of the very limited selection. then just get pissed off and walk away.
Yeah, I noticed that some of the RedBox's are putting in older titles now (Pretty in Pink, Ghostbusters, for example). If someone really wants to see Bedtime Stories or Yes Men, and it's not available, Ghostbusters ain't gonna help.

Worse, some of these people---and I've seen it--- have seen "$1 a night" and FISH IN THEIR POCKETS FOR CHANGE. A great deal of people in our town don't have credit/debit cards, so if they can't get an account with us, RedBox is a moot point.
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  #5  
Unread April 7th, 2009, 11:38 AM
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lol redbox
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  #6  
Unread April 7th, 2009, 12:18 PM
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zooworker zooworker is offline
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Hey, maybe BB can rent some floor space for red box.
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  #7  
Unread April 7th, 2009, 12:33 PM
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BUYMECAR BUYMECAR is offline
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Quote:
Originally Posted by zooworker View Post
Hey, maybe BB can rent some floor space for red box.
probably wouldn't be a bad idea.

'hey the redbox machine in the corner isn't working. can i get one of your movies for a buck?'

'no, get out.'
  #8  
Unread April 7th, 2009, 02:33 PM
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Quote:
Originally Posted by BUYMECAR View Post
probably wouldn't be a bad idea.

'hey the redbox machine in the corner isn't working. can i get one of your movies for a buck?'

'no, get out.'
And for a buck we can exchange one of our defectives for one of their good ones.
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  #9  
Unread April 7th, 2009, 10:04 PM
Ghost of AtlanticVamp Ghost of AtlanticVamp is offline
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Quote:
Originally Posted by zooworker View Post
Hey, maybe BB can rent some floor space for red box.
That's awesome! Wish I'd thought of it. ^^^^
 

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