Coinstar Q1 Tops Estimates; Full Year Outlook Slightly Light

Lee Stewart · 04-27-2012, 04:51 PM

Quote:

Originally Posted by PSound

Video games take up no stock space?

Of course they do.

10% of BD stock is generating 8.7% of Redbox kiosk revenue.

But almost 11% of total revenue

**bruceames** · 04-27-2012, 04:55 PM

8, 10, 11 percent, whatever, it's still a very small percentage compared to sell through.

Anyone else find it odd that gaming was 7.5% in Q4 2011 and only 5.0% in Q1?

Lee Stewart · 04-27-2012, 05:00 PM

Quote:

Originally Posted by bruceames

8, 10, 11 percent, whatever, it's still a very small percentage compared to sell through.

BD has not enjoyed the high rental revenues that DVD has. Been that one since day 1.

Quote:

Anyone else find it odd that gaming was 7.5% in Q4 2011 and only 5.0% in Q1?

They explained that in their Q1 2012 Prepared Remarks:

Quote:

Video games performed as we anticipated, representing approximately 5% of Redbox revenue. Q1, which is typically slower for game publishers, included 15 new releases under the various formats (PS3, Wii and XBOX 360) compared with 21 in Q4 2011. The impact of fewer video game rentals was partially offset by a higher average check, with the holding period slightly more than three nights on average.

In addition, we continued to refine our video game purchasing and allocation methodologies, which included a lower percentage of video game content in the kiosks. As a result, we improved overall margins on video games. The percentage of games in the kiosk may now fluctuate more as we continue to focus on the strongest titles and the best rental platform for each specific title.

PSound · 04-27-2012, 05:02 PM

Quote:

Originally Posted by bruceames

8, 10, 11 percent, whatever, it's still a very small percentage compared to sell through.

Anyone else find it odd that gaming was 7.5% in Q4 2011 and only 5.0% in Q1?

Not really.

2/3 of Redbox revenue increase came from existing kiosks due to the price hike. The remaining 1/3 revenue increase came from new kiosks (installed or acquired).

PSound · 04-27-2012, 05:06 PM

Quote:

Originally Posted by Lee Stewart

But almost 11% of total revenue

No. BD is general 8.7% of total revenue.

That is it.

With 10% of stock (per latest info from Redbox).

You cannot just take video games out of one side of the equation (revenue) without also doing the same for the other side (stock %). Since we don't stock percentage for video games, the only way we can come up with relative performance of stock % vs revenue is by including revenue from video games.

Lee Stewart · 04-27-2012, 05:08 PM

Quote:

Originally Posted by PSound

No. BD is general 8.7% of total revenue.

That is it.

With 10% of stock (per latest info from Redbox).

You cannot just take video games out of one side of the equation (revenue) without also doing the same for the other side (stock %). Since we don't stock percentage for video games, the only way we can come up with relative performance of stock % vs revenue is by including revenue from video games.

Oops - correction . . .

Almost 11% of total OD revenue.

Kosty · 04-27-2012, 09:45 PM

Quote:

Originally Posted by Lee Stewart

Total Redbox Revenue Q1 2012 = $502.9M

BD Revenue = $43.75M (8.7%)

Video Game Revenue = $25.14M (5.0%)

Do we know what the video game revenue was in 1Q 2011 and 4Q 2011 or for any other quarters for Redbox?

That way we could subtract it out and see what the DVD and Blu-ray and OD revenues were in those periods were as well and get a better idea of Blu-ray's growth as a percentage share of Redbox's OD only revenues for the past year.

Since we don't usually consider gaming revenues in calculating out Blu-ray or DVD's marketshare of OD, I'd be curious to see what those numbers are for the data we have available.

11% for Blu-ray's revenue marketshare of Redbox's 1Q 2012 DVD + BD = OD rentals is still pretty modest but its a better identifiable apples to apples comparison to the Blu-ray revenue marketshare we usually use of for rental and sell through that does not consider gaming sku sales or rentals.

Also, since gaming rentals obviously are a new attraction that occurred about the same time that Redbox starting increasing and nationally stocking more Blu-ray titles in their kiosks...that's targeting also PS3 users and gamers as well that may pull some of their normal interest in watching Blu-ray movies on their PS3s into playing PS3 games instead.

Either way Redbox makes money on PS3 users, but that might also be a moderating influence on Blu-ray rental growth in the short term as that would eat up some time of PS3 owners, who are still a significant share of Blu-ray owners and movie watchers for 4Q movies.

PSound · 04-27-2012, 09:49 PM

Quote:

Originally Posted by Lee Stewart

Oops - correction . . .

Almost 11% of total OD revenue.

No worries.

Just don't want the PR pimps to start distorting the actual revenue percentage that Blu-ray is contributing to Redbox, especially in light of Blu-ray underperforming on revenue based on how much stock they have in Redbox kiosks.

**bruceames** · 04-27-2012, 10:12 PM

Quote:

Originally Posted by PSound

No worries.

Just don't want the PR pimps to start distorting the actual revenue percentage that Blu-ray is contributing to Redbox, especially in light of Blu-ray underperforming on revenue based on how much stock they have in Redbox kiosks.

Must you use the term PR pimps in nearly every post? It smacks of bitterness.

PSound · 04-27-2012, 10:36 PM

Quote:

Originally Posted by bruceames

Must you use the term PR pimps in nearly every post? It smacks of bitterness.

I use it to best describe who and what we have observed.

It seems right on target for the activities of sources posting false information to counter discussion based on facts. And as those sources continue to post falsehoods (see HMM falsehoods in publication title for just one example), I will continue to use it until false info is no longer disseminated by those sources.

It is not bitterness. It is acknowledgment of what we all know is occurring in these broader discussions.

Lee Stewart · 04-27-2012, 10:55 PM

For 2011 . . .

1. What was BD's total sales revenue?

2. What was BD's total rental revenue?

mikemorel · 04-28-2012, 07:26 AM

Quote:

Originally Posted by Kosty

Not that surprising that the Redbox rental revenue marketshare of about 9% would be lagging the overall sellthrough revenue marketshare for Blu-ray of around 24% for 1Q 2012 since Redbox has only been renting Blu-ray's nationally for only a short while compared to the time that Blu-ray has had for sell through growth.

Why would anyone be surprised about that? Seems about right.

Redbox didn't stock blu-ray from 2006 through 2010 because there was no money to be made stocking blu-rays in Redboxes during that time period, as evidenced by the poor 8.7% disc share in 2012, six years after introduction. They could have rented blu-rays earlier; but chose not to.

Quote:

Originally Posted by Kosty

So pretty much Blu-ray went from not much in revenues and a very low percentage of sales for Redbox at the start of 1Q 2011 to 8.7% of their revenues a year later in 1Q 2012.

Plus the change in absolute revenues generated from Blu-ray went up +44.25% in their last two quarters?

If $1.50 blu-ray disc rentals in Redbox accelerates with higher volumes, blu-ray disc sales will likely start to decline. This should be troubling to studios, and therefore, to you. You should be happy that blu-ray rents so poorly.

04-27-2012, 04:55 PM	#47
bruceames Super Moderator Join Date: May 2006 Location: Novato, CA Posts: 15,346	8, 10, 11 percent, whatever, it's still a very small percentage compared to sell through. Anyone else find it odd that gaming was 7.5% in Q4 2011 and only 5.0% in Q1? __________________ RIP Kosty.

04-27-2012, 10:55 PM	#56
Lee Stewart Muscle Cars Forever! Join Date: Jan 2007 Location: Albuquerque, NM Posts: 35,092	For 2011 . . . 1. What was BD's total sales revenue? 2. What was BD's total rental revenue?