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Old 03-02-2012, 02:35 AM   #1728  
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Join Date: Aug 2007
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Redbox is buying about $800 M of physical product most directly from the studios then the rise in that amount over the past couple years with Redbox's rise has gone to the studios directly with their studio providing agreements where before those DVD sales to stock Redbox kiosks from retailers like Walmart were counted as consumer level DVD sales at retailers like Walmart when they had previous studio workarounds. In this case for Warner those Redbox inventory work arounds would again count as consumer level DVD and Blu-ray sales for the select titles they choose to stock.

If Blu-ray was 7% of the Redbox unit volume for 2011 and most Blu-ray rental transactions for the year were $1.50 vs $1.00 for DVD ($1.20 later 4Q 2011) then Blu-ray revenues for Redbox was probably around 10% or so of Redbox revenues assuming Blu-ray rentals stayed out about the same rate as DVD rentals.

Coinstar CEO: Warner Workaround for Redbox ‘A Success’
28 Feb, 2012
By: Chris Tribbey


“We only buy around one studio, and that’s Warner,” Davis said. “We have direct deals with everyone else, and that has worked well. We think that we can bring a lot to the party when we work with our studio partners on helping them sell product. Obviously we buy a lot of product. If you look at it on an annual basis, we’re buying $800 million-plus in physical content.


Davis also noted in his presentation that Redbox aims to have 45,000 to 60,000 kiosk locations in the United States and that after its first-ever price increase during the fourth quarter of 2011, “We’re not thinking about pricing now. We made that move. It should last for a good while.”


Regarding Blu-ray, Davis said high-def currently accounts for around 7.5% of rentals at Redbox kiosks, but with the U.S. household penetration of Blu-ray players much higher (one third, according to the Blu-ray Disc Association), Davis said Redbox is hoping that number will rise. “We view that as white space,” he said of the difference.
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