RedBox Rentals Benefiting from Netflix Change-Up
Coinstar's Redbox movie rental kiosks are benefiting from price changes by competitor Netflix, according to a Piper Jaffray analyst.
THE SPARK: Netflix Inc. has already said that it expects to lose subscribers because of recent pricing changes, which left many customers paying more. The company had 24.6 million subscribers at the end of June but warned last month that it expected a net 600,000 to leave by the end of September. That would be by far the worst downturn in the company's history.
And on Monday, the company reversed another decision to put its DVD-by-mail and Internet streaming services on separate websites, a plan that had been widely derided by company's subscribers.
Redbox could pick up some of Netflix's disgruntled customers.
THE BIG PICTURE: Netflix is separating its DVD-by-mail and Internet streaming service, emphasizing the online service. Its movies can already be streamed directly to PCs, smartphones, tablets, DVD players, game consoles and TV sets.
Meanwhile, Bellevue, Wash.-based Coinstar Inc. has 33,000 Redbox DVD kiosks in supermarkets and other retailers, where shoppers can rent DVDs of new releases.
Coinstar has already benefited from other competitors' troubles. It said in July that its second-quarter profit doubled as its Redbox business continued to expand after competitor Blockbuster Inc. filed for bankruptcy protection. Revenue from Redbox locations grew 34 percent to $363.9 million.