...Coinstar A Review of Some Related Literature Webster University February 20, 2013 ABSTRACT Coinstar, Inc. is an American company that was founded in 1991 and is headquartered in Bellevue, Washington. Redbox is an Automated Retail, LLC, and is a leading vendor of rental DVDs through automated kiosks. It is a wholly owned subsidiary of Coinstar, Inc. Redbox has kiosks active in more than 14,000 locations in North America; Redbox has served more than 40 million customers. Redbox continues to change the DVD rental industry with kiosks located in the nation’s leading grocery stores, convenience stores, discount stores, and other locations nationwide. Redbox got its start with the launch of its DVD rental kiosks in McDonald’s locations in Denver, CO, Minneapolis, MN, and Houston, TX. Redbox needed a solution that was able to increase DVD capacity over existing machines as well as improve overall product functionality for kiosks located primarily at McDonald’s restaurants. Redbox who was faced with an advertising campaign deadline revamped their machines, which in the beginning included groceries. They realized that the DVD’s were doing better than the food and revamped their machines to focus on this source only. Redbox specializes in the rental of DVDs, Blu-ray Discs, and video games via automated retail kiosks. Some of the key people in the roles of Redbox are Anne Saunders, President of Redbox, J Mitch Lowe, former...
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...| | Analysis of Redbox University of Saint Mary Cairo Team November 9, 2012 Redbox Coinstar, Inc., through its subsidiaries, provides automated retail solutions primarily in the United States, Canada, Puerto Rico, Ireland, and the United Kingdom. The company owns and operates self-service Redbox kiosks that allow customers to rent or purchase movies and video games; and self-service coin-counting kiosks where consumers can convert their coin to cash, a gift card, or an E-certificate. Coinstar, Redbox's parent company, is led by a savvy management team. By maximizing the value of Redbox and investing in new technologies it is the best way to capture opportunities along with various dimensions such as new customer segments, geographic, product segments, and strategic moves. Coinstar has built a promising future by taking their kiosk-based business to a new level. Strategic investment, position and new technology lead the way to the competitive advantage in the movie rental industry. The Redbox Company is a subsidiary of Coinstar Inc.; it is a kiosk run retailer which provides movie rentals to consumers at an inexpensive rate. Redbox Automated Retail LLC began operations in 2004 with funding provided by McDonald's Ventures, a subsidiary of McDonald's Corporation. The initial Redbox vending machines...
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...clear that Netflix is 100% correct in their focuses for the future. Netflix can be watched on multiple gaming devices, smart phone and of course laptops too and that makes it more marketable. They also have rights to certain movies that others trying to get involved in the field will not be able to use; this makes it hard for their competitors. They offer more than 10,000 movies and series though their streaming service alone. Netflix can be streamed internationally. Redbox’s parent company Coinstar Inc. has teamed up with Verizon; both companies have a large presence in each of their own areas of business and will have followers into this new unnamed venture. Both companies plan this to be an addition to their current established fields; Verizon has more than 118 million customers they plan to pitch the idea too. Verizon, the main investor, plans to back this new company with 65% of the monetary start up; where Coinstar is initially only putting in 35%, about 14 million. Coinstar says they intend on...
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...COINSTAR INC (CSTR) 10-K Annual report pursuant to section 13 and 15(d) Filed on 02/09/2012 Filed Period 12/31/2011 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended: December 31, 2011 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 000-22555 COINSTAR, INC. (Exact name of registrant as specified in its charter) Delaware 1800 114 Avenue SE, Bellevue, Washington (Address of principal executive offices) (State or other jurisdiction of incorporation or organization) th 94-3156448 (I.R.S. Employer Identification No.) 98004 (Zip Code) Registrant's telephone number, including area code: 425-943-8000 Securities registered pursuant to Section 12(b) of the Act: Common Stock, $0.001 par value Name of each exchange on which registered: The NASDAQ Stock Market LLC Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨ Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.: Yes ¨ No x Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities...
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...Distribution Strategy Report Redbox Abstract Redbox was conceived and started in 2002 by the McDonald’s corporation. In the beginning McDonalds placed 12 kiosks to test the market and customer interest in the concept. The initial kiosks offered food vending items and DVD rentals. Today Redbox has over 24,900 kiosks placed throughout the United States. The distribution strategy that McDonalds used was Direct Channel strategy and Single Channel strategy. As the concept continued to be successful, McDonalds continued to use Direct Channel strategy and also started using the Multiple Channel Stategy. In 2005 Coinstar purchased 47.3% of Redbox. When you think of McDonalds, a person usually thinks of fast food like hamburgers and their signature French fries. But in 2002 McDonalds wanted to find a new way to bring more customer traffic to their restaurants, while also being able to provide convenience to their customers. McDonalds introduced kiosks machine where a customer could get select needed or wanted items. The original kiosks included items like sandwiches, eggs and milk, while also offering DVD rentals. McDonalds choose this direct and single channel distribution strategy to test the market. Direct channel distribution strategy is defined as ‘selling products to end users through independent intermediaries such as wholesalers, distributors, retailers and or agents’. (Gordon, 2013) The single channel distribution strategy, is defined as “utilizing only...
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...Netflix Domestic Strategy Prepared for: Netflix Senior Management Reed Hastings, Co-Founder and CEO Kelly Bennett, Chief Marketing Officer Jonathan Friedland, Chief Communications Officer Bill Holmes, Chief Business Development Officer Neil Hunt, Chief Product Officer David Hyman, General Counsel Patty McCord, Chief Talent Officer Ted Sarandos, Chief Content Officer David Wells, Chief Financial Officer August 4, 2012 Through this report, our consulting team has taken the opportunity to analyze and provide recommendations for future domestic business strategy of Netflix. As expressed in the company’s founder’s conference last October, we would like to help you build upon your stated vision for the future including: • Becoming the best global entertainment distribution service • Licensing entertainment content around the world • Creating markets that are accessible to film makers • Helping content creators around the world to find a global audience We would also like to follow the nine values you use to guide your company: • Judgment • Productivity • Creativity • Intelligence • Honesty • Communication • Selflessness • Reliability • Passion In this report, we will address the following issues to provide a foundation for overcoming Netflix’s domestic challenges: I. Competitive Dynamics A. Key Competitors B. Competitive Response II. Strategic Management/Competitive Issues A. Key Strategic Issues B. Strategic...
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...Blockbuster’s lack of blockbuster Frankie L. Jones February 11, 2013 BUS: 642 Thomas Hennefer Abstract Blockbuster video, the once dominant force behind consumers’ movie rental needs has suffered a significant loss in revenue to the rise of RedBox and Netflix. The competitive advantage offered by the two companies has tapped into Blockbuster’s market and cause a lack of blockbuster for the company. Since 2009 the company has continue to reported decreased revenue and profits against its competitors. In 2010 the company filed bankruptcy and has since then implemented new services and products similar to its competitors, however, customer’s still prefer RedBox and/or Netflix. Once upon a time on a Friday night after work, you were looking to go home, relax, and watch a good movie. You come up on a big blue sign with yellow lettering, and think, “I’LL RUN TO BLOCKBUSTER!” Today, we’re looking for the nearest RedBox, or browsing Netflix for a good flick. There was time when families would take a trip to Blockbuster, order a pizza, and make it a movie night. Today, people have the luxury of not even leaving the house to find a good movie; thanks to Netflix. After a routine run to Wal-Mart, Walgreens, or Kroger’s it has become second nature to browse the RedBox, especially since the cost is only $1. But what has happened to good ol’ Blockbuster? Over the past few years Blockbuster video locations have steadily declined. Blockbuster, the once powerful source for movie...
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...closely fit the competitive approach that Redbox is taking? Defend your answer. The chief elements in Redbox’s strategy are: a. Attracting customers with low prices and convenience. Charging customers $1 dollar per day as a rental fee is very attractive to users and the firm. It is attractive to customers because their nightly entertainment is very cheap in comparison to other alternatives. It is beneficial to Redbox because in the event that the customer forgets to return the movie, they are charged double the rental amount which doubles revenues instantly. b. Rapidly increase the number of shopping locations with a Redbox kiosk. Most Redbox locations are between the cash registers and front entrance of the store much like Coinstar. They have recently added locations outside the stores to replicate soda machines and newspaper stands. This provides customers with convenient locations to rent and return their movies. c. Create a recognizable brand name. Redbox has created a recognizable brand name by using bright red and white colors for their kiosk. By using red, Redbox locations stand out and are easily recognizable to customers. d. Make the machine easy to use. By making the machine easy to use, customers are able to browse through movies using touch screen technology quickly. They are also able to purchase movies and replaceable cases. Customers’ time at the kiosk is even quicker when there are two kiosk and/or the customers already knows what movie...
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...Century Fox, etc., they had to sell their movie only 30 to 45 days after the release of the movie. Redbox is able to keep track of the number of each title in each kiosk; however, when a title is completely unavailable at a kiosk, the company hires field staff to move movies around and fill in empty slots; which seems a little inefficient and an unnecessary cost. The biggest expense Redbox incurs is content acquisition and licensing agreement. The company spends hundreds of millions of dollars on license agreements with each movie studio. Therefore the question to be asked is “How to reduce the company’s content acquisition cost?” Summary of Facts – Redbox is leading the way in the premier industry of DVD rental kiosks. With Coinstar as its established parent company, Redbox is currently surpassing its competitors with its number of self-service kiosks. “At the time of the February 2009 acquisition, Redbox had some 12,000 kiosks in supermarkets… with plans to add 6000 to 8000 kisosk locations during the remaing of 2009.” Redbox’s growing popularity is facilitated...
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...The penny is no longer economically viable The penny is not worth the metal it is made out of. It is a coin that cost more to make than it is worth. The crux problem with the penny, in the modern economy, is that it will buy you nothing. Since nobody has the time to do a sales tax calculation in their head while waiting in line to buy their products, and even if you did the time would not be worth digging through your pockets, or purse, for exact change. No state will accept pennies in bulk and very few machines still take pennies. The only reasonable thing to do with pennies is store them in a giant glass jar and then dump them in a Coinstar, a machine that charges you 10% to spend money that you already have. The penny, at this point in time, manages to be both extremely useless and impractical, it is a Congressional gaffe that the penny is still being made. Making the penny is not cost effective, and pennies do not get used anyway. The penny is currently an out of date, economical blunder. As you probably know the penny is worth exactly a hundredth of a US dollar. This is all well and good, except the fact that it takes one and one half a cent more to make a penny. This means every time the U.S. Mint produces one penny it wastes one and a half cents. This may seem insignificant, however, according to the U.S. Mint almost 5 billion pennies were produced in 2011 alone. That is 50 million dollars in pennies, at a cost of 7.5 billion dollars, so in just 2011 taxpayers...
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...Netflix - a new business model that redefined movie rental industry. Netflix, a web based DVD rental company was a successful company that captures market share from players like Blockbuster and Hollywood. It entered into online video streaming business simultaneously. With the recent developments in internet bandwidth capacity, this opened a new horizon in movie renting business. Netflix plans were very competitive providing unlimited DVD rentals with no late fees. This feature paired with the online streaming option along with an intelligent system that proposes and predicts customers liking index helped Netflix develop a large customer base. The online streaming sector had the advantage of providing additional revenue with no marginal cost, making the service very profitable. The only costs that incurred were copyright acquisition costs. The costs of acquisition of a copyright of DVD is less when compared to cost of online streaming license. This made Netflix to start up with a limited number of online movie titles and TV programs. However, Netflix's attempt to divide these services into two individual services and increase the price of the plans by 60% impacted its customer base and profitability. There is a growing concern among investors as the company's performance is below expectations in the recent times. The negative growth problem Netflix was well known as a company that provided got return on investment. The company performed remarkable well when...
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...Background Who is the king of the movie rental industry? Is it Blockbuster, Redbox or Netflix? Blockbuster was the king of VHS rental with their brick and mortar stores for more than 20 years. Netflix was the first to market with the idea of shipping DVDs directly to consumer’s homes but are now focusing their resources and attention to online streaming. Netflix is slowly getting out of the DVD and Blu-ray rental game by raising the prices of their DVDs and Blu-rays. Netflix is spending more money to increase the size of their online library for streaming. The two companies that are battling it out to be the king of the rental industry are Redbox, a company owned by Coinstar Inc., and Blockbuster. This paper will focus on how Redbox entered the market through Disruptive Innovation and what Redbox needs to do to better position themselves in a volatile market place. I will also look at the mistakes Blockbuster made and offer solutions on how Redbox can avoid the organizational decline that Blockbuster experienced. I use Wall Street Journal and peer-reviewed academic journals for my references. To understand the full scope of how Redbox entered the market I will look at the Disruptive Innovation Theory. Disruptive Innovation Theory is a term that was coined by Clayton Christiansen. Clayton Christiansen is a professor at Harvard Business School. He has written a number of books on the subject. In an interview done by Smith, Christensen defines disruptive Innovation...
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...Table of Contents Introduction……………………………………………………………………........1 Industry Overview………………………………………………………………2-8 Client Profile & Competitor Analysis……………………………………9-17 Comparative Analysis……………………………………………………….18-19 Consumer Analysis………………………………………………………….20-23 Consumer Insights………………………………………………………….24-29 Survey…………………………………………………………………………….30-31 Results……………………………………………………………………………32-41 Recommendations…………………………………………………………..42-45 Appendix I……………………………………………………………………..46-48 Appendix II………………………………………………………………….…49-55 References………………………………………………………………………56-57 Will Haven, Lucy Ross, Jessica Stephens, Lauren West & Bonnie Willard Redbox is leading the way in the premier industry of DVD rental kiosks. With Coinstar as its established parent company, redbox is currently surpassing its competitors with its number of self-service kiosks. Redbox’s growing popularity is facilitated by its physical distribution, which places the kiosk in high traffic locations such as WalMart, Kroger, McDonalds and Walgreens. Due to redbox’s standing as the progressive option for DVD rental, its decision to target the 18-24 year old demographic was evident. This demographic embodies the idea of innovation, experimentation, and dependency on technology, all of which are imperative to transform an introductory product into a nationwide brand. The following report provides secondary and primary research in order to construct an accurate glimpse of redbox and its emergent status within the 18-24 year...
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...Redbox – Marketing Plan U.S.A Esther Orosz, Wiebe Poelmann, Shu K, Martin Gerzmann 2/15/2011 Redbox – Marketing Plan 1 CONTENTS 2011 1 Contents ......................................................................................................................................................................1 2 Executive Summary ....................................................................................................................................................3 3 Introduction ................................................................................................................................................................3 4 Problem Statement ......................................................................................................................................................4 5 External Analysis ........................................................................................................................................................4 5.1 Marketing Segmentation .....................................................................................................................................4 5.1.1 Geographic Segmentation ............................................................................................................................4 5.1.2 Demographic Segmentation .........................................................................................................................4 5.1.3 Pshychographic...
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...EXECUTIVE SUMMARY Both Netflix and Redbox are in competitive but still growth industry. The ability to keep good relationships with suppliers, have up to date, reliable technology and continue to look into moving into more Video On Demand services. It is recommend to look in to expanding services into video game rentals alongside movie rentals. ANALYSIS Renting Movie And TV Episode Industry Competitive Forces Competition among industry rivals is medium to strong. While they still hold most of the market for movie rentals at this time local movie stores are plagued with financial issues leading to store closures and bankruptcy. They are losing market share to less expensive and more convenient kiosk and by-mail services for physical DVD and the ever increasing consumer move to Video-On-Demand (VOD). Internet movie providers bring strong competition by offering a large variety at a relatively inexpensive price quickly and easily to the customer’s computer, TV or handheld device. Cable companies have also joined the VOD trend offering movies rentals without the hassle of going to the video store but price is relatively the same and variety can be limited. Movie rentals from kiosk centers located in popular locations offer low priced rentals for consumers that prefer the physical DVD’s but currently lack variety. Potential Entry into this market is medium. The initial start-up cost could be prohibitive for companies starting from the ground. For those companies adding VOD...
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