Coinstar, the company behind DVD-kiosk service Redbox, today announced it had would acquire NCR's entertainment business for as much as $100 million. NCR, once the central rival to Redbox through its Blockbuster Express brand, operates thousands of kiosks which will now come under Redbox and Coinstar's control.
The announcement comes on the heels of another company announcement earlier today that Redbox would be partnering with Verizon for a subscription-based streaming competitor to Netflix. Now, with NCR's entertainment business under its belt and a digital service in the works, Redbox is in a strong position to shake up the entertainment and retail industries, especially with its 35,400 point-of-sale kiosks already dotting the landscape. And as if today's announcements weren't enough, Coinstar also reported that its quarterly profit had doubled today, jumping to $31.5 million.
The twofold announcement today indicates Redbox and Coinstar are far from leaving the kiosk business. Though many interpreted its announced partnership with Verizon as an indication of the company's digital future, the acquisition indicates that Redbox has doubled down on its efforts and fortified its position in the kiosk business. "While some may have thought that physical was done, we think there is a bright future in physical," Scott Di Valerio, CFO of Coinstar and interim president of Redbox, tells Fast Company. "We don't think physical is going away for three, four, five, seven, 10 years. Physical is going to be around for quite some time, and we believe we can leverage that marketplace."
He adds, "Streaming is great--it's really exciting--but we're also looking at how we innovate in this automated retail space."
When asked what those innovations might look like, Di Valerio declined to go into much detail, indicating that he believes Redbox brand has a larger reach in entertainment among consumers.
"We have more locations than McDonald's and Starbucks combined," says Gary Cohen, SVP of marketing and customer experience at Redbox. "We have this big customer base; we have this direct connection with the customers; we have physical points of presence; we are in the places that America shops."
"You put all that together, and there's a lot of ways you can vector off," Cohen adds, with a knowing smile.
[Image: Flickr user Jeremy Kunz]