Coinstar: Tablets Killed The Video Kiosk Star? [View article]
The DEG recently released in Q1 2013 report, and kiosk revenue was down 5% in Q1. At the same time, B&M disc rentals were down 12%.
VOD was up 15.73%.
The fundamental issue with Redbox is that the B&M rental market just continues to shrink (even kiosks as a whole). Redbox is the classic buggy whip case.
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
Exactly which news source stated that Netflix had "lost connection" with Warner, Universal and MGM? Or stated that Netflix would never have content from those studios?
Your statement was incorrect. I suggested you do more research before posting false information on Seeking Alpha.
The facts are that Netflix has a deal with MGM via Epix. There is Universal content up on Netflix streaming right now. Half of the Starz content will be back as Netflix has a deal in place with Disney for exclusive rights during the Pay TV window. Likewise, Paramount and Lionsgate content is also available 90 days after the Pay TV window due to the deal with Netflix.
First run Pay TV access from Warner and Universal are held by HBO. Nothing has changed on that front. The entire story was built on (pardon the pun) a house of cards. Old library content entering and leaving the service is nothing out of the ordinary.
The same is true for HBO (library content enters and leaves rotation).
Again, the REAL STORY (not false information) -
"The story currently relating Warner Archive Instant to Netflix title availability is inaccurate. Warner Archive Instant is not involved in Netflix's business decisions and none of the titles that were pulled from Netflix yesterday are Warner Bros. owned. Further, Warner Archive Instant content is drawn solely from the Warner Bros Entertainment library and we are not streaming Universal, or MGM/ United Artists owned content on this site."
- Warner Archive
And the list of the "Top Titles" that were removed from Netflix yesterday.
Beach Red (1967) The Bed-Sitting Room (1969) and How I Won the War (1967) Billion Dollar Brain (1967) The Delinquents (1957), Thieves Like Us (1974), and Vincent & Theo (1990) Dr. No (1962) and Goldfinger (1964) Gregory’s Girl (1984) Kes (1969) and Ladybird Ladybird (1994) Kiss Me, Stupid (1964) and One, Two, Three (1961) Marat/Sade (1967) Never on Sunday (1960) Odds Against Tomorrow (1959) Stardust Memories (1980)
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
Per Warner Archive - NONE OF THE TITLES PULLED ARE WB OWNED.
There was no "lost connection" with any studio. MGM is part of Epix HD (which has a contract with Netflix). I would suggest you NOT spread blatant misinformation on Seeking Alpha. Please do more research before making a false comment that Netflix lost connection to three studios.
"The story currently relating Warner Archive Instant to Netflix title availability is inaccurate. Warner Archive Instant is not involved in Netflix's business decisions and none of the titles that were pulled from Netflix yesterday are Warner Bros. owned. Further, Warner Archive Instant content is drawn solely from the Warner Bros Entertainment library and we are not streaming Universal, or MGM/ United Artists owned content on this site."
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
Netflix also added 500 new titles today.
And there will be months where there is a net increase or a net decrease of total titles, along with higher quality titles (like originals and Disney content during the Pay TV window).
I appreciate you expanding your understanding but if you have been following these trends for some time, there is nothing particularly odd or unique about the content changes today.
Indeed - Here are the "Top Titles" that were removed today (from those trying to make this a story):
Beach Red (1967) The Bed-Sitting Room (1969) and How I Won the War (1967) Billion Dollar Brain (1967) The Delinquents (1957), Thieves Like Us (1974), and Vincent & Theo (1990) Dr. No (1962) and Goldfinger (1964) Gregory’s Girl (1984) Kes (1969) and Ladybird Ladybird (1994) Kiss Me, Stupid (1964) and One, Two, Three (1961) Marat/Sade (1967) Never on Sunday (1960) Odds Against Tomorrow (1959) Stardust Memories (1980)
Honestly - other than the Bond movies, do you think anyone but the serious movie junkies are going to even miss not having those titles available?
When will the DVD business of Coinstar (CSTR -1.3%) become fully saturated? The answer depends on who you ask with Wedbush seeing revenue falling even as new kiosks are being added while B. Riley isn't so sure the lack of blockbuster films in Q1 isn't a big factor in Coinstar's sluggish DVD business. During its earning conference call, execs noted the company is taking back market share as competitors peel away and think Coinstar will continue to have an advantage in the market for new releases. (transcript) [View news story]
Box office strength of Home Video releases in Q1 2013 were up 30.6% compared to Q1 2012 ($3.17 billion vs $2.43 billion).
And yet Redbox revenue growth was nowhere near that amount, and same kiosk revenue was down.
Anyone else see a near term problem with this for Coinstar?
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
From my understanding, Redbox Instant is paying differently than Netflix and Amazon.
Each (Netflix and Amazon) pay for a bulk of content over a certain time period. That makes them fixed cost models. The cost of the content over a set period remains fixed regardless of the number of subs.
Of course, the number of subs may impact what content owners ask to get paid during negotiations, but that does NOT change that ultimately the costs are not directly associated to number of subs within a particular time period.
So Netflix (I will leave out Amazon for a second as how they value subs is different because of their retail business) can increase margins while maintaining or even increasing content by assigning a value on content based on their knowledge of subscriber preferences. That single piece (knowing how much their subs value certain content) gives them a strong advantage in content negotiations. And to be fiscally responsible, they can walk away from content if the owner is asking too much - and the content owners do NOT have that info so they are flying a bit blind in negotiations.
Coinstar, on the other hand, is like a cable channel. They pay a fixed rate per sub for that content. And take a look at how the relationship between cable companies and networks work. In that relationship, who controls pricing? In that relationship, does new content (or even maintaining content) come without any additional cost to the consumer?
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
It is even more basic than that. They are paying PER SUB for Epix.
Let's say they are paying Epix $2 per sub (probably not too far off the mark as that is probably what MSOs pay Epix for premium subs). That means for every Redbox Instant customer, $2 of revenue goes straight to Epix (just like how the MSOs pay the network providers).
So... $8 revenue, $4.80 allocated to discs leaves $3.20 for streaming minus $2 for Epix leaves $1.20 for costs, profits and content expansion. Even if you cut Epix down to $1.50, you are still only talking $1.70 per sub left for expansion.
Again... they have little room to add content without increasing prices or cutting margins.
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
Redbox Instant is variable cost model. Meaning they pay a set price PER SUB just like the MSOs.
Lower risk up front, but limited ability to add content without impacting margins or increasing price.
Paying a set price per paying sub is the MSO (cable and satt) model. And you need to look at that model to understand who controls pricing in that model.
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
I understand you sharing about the transaction VOD option, but the Redbox Instant offering is worst in class.
There are far better offerings in absolutely every criteria. That is important to understand if you are looking at the impact the offering will have on the Redbox business.
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
The problem is that Redbox Instant is going the MSO model to pay for the content (paying the content owners directly per sub).
That means (like the MSO model), Redbox Instant will not be able to add new content without raising prices, lowering margins or both.
Keep in mind that if someone takes advantage of the 4 nights of DVD rentals, that means that the effective revenue per sub for Redbox Instant STREAMING is $3.20 per month. Even if CSTR/Verizon is only paying Epix $1.50 a month per user for Epix content, that is very little room to add new content without a significant impact on margins (whether you calculate that hit against the streaming side or the disc side).
The Whitney Tilson Indicator: Time To Short Netflix? [View article]
http://bit.ly/YGeBAN
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
They are considered THE resource for information on Home Video revenue (on a quarterly and annual basis).
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
Redbox is the last, best model of a dying market.
They are the classic horse buggy whip scenario. Making good money owning a market that won't exist in 5 years.
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
NOTE: Box Office strength of releases was up 30.6% in Q1
SELL THROUGH (ALL GROWTH)
EST (Electronic Sell Through) - + 51.51%
OD (discs) Sell Through - + 2.12%
PHYSICAL RENTAL (ALL DECLINE)
B&M Rental - DOWN 12%
Physical Subscription - DOWN 22.32%
Kiosk - DOWN 4.91%
ELECTRONIC RENTAL (ALL GROWTH)
VOD - + 15.73%
Subscription Streaming - + 29.35%
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
VOD was up 15.73%.
The fundamental issue with Redbox is that the B&M rental market just continues to shrink (even kiosks as a whole). Redbox is the classic buggy whip case.
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
Your statement was incorrect. I suggested you do more research before posting false information on Seeking Alpha.
The facts are that Netflix has a deal with MGM via Epix. There is Universal content up on Netflix streaming right now. Half of the Starz content will be back as Netflix has a deal in place with Disney for exclusive rights during the Pay TV window. Likewise, Paramount and Lionsgate content is also available 90 days after the Pay TV window due to the deal with Netflix.
First run Pay TV access from Warner and Universal are held by HBO. Nothing has changed on that front. The entire story was built on (pardon the pun) a house of cards. Old library content entering and leaving the service is nothing out of the ordinary.
The same is true for HBO (library content enters and leaves rotation).
Again, the REAL STORY (not false information) -
"The story currently relating Warner Archive Instant to Netflix title availability is inaccurate. Warner Archive Instant is not involved in Netflix's business decisions and none of the titles that were pulled from Netflix yesterday are Warner Bros. owned. Further, Warner Archive Instant content is drawn solely from the Warner Bros Entertainment library and we are not streaming Universal, or MGM/ United Artists owned content on this site."
- Warner Archive
And the list of the "Top Titles" that were removed from Netflix yesterday.
Beach Red (1967)
The Bed-Sitting Room (1969) and How I Won the War (1967)
Billion Dollar Brain (1967)
The Delinquents (1957), Thieves Like Us (1974), and Vincent & Theo (1990)
Dr. No (1962) and Goldfinger (1964)
Gregory’s Girl (1984)
Kes (1969) and Ladybird Ladybird (1994)
Kiss Me, Stupid (1964) and One, Two, Three (1961)
Marat/Sade (1967)
Never on Sunday (1960)
Odds Against Tomorrow (1959)
Stardust Memories (1980)
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
There was no "lost connection" with any studio. MGM is part of Epix HD (which has a contract with Netflix). I would suggest you NOT spread blatant misinformation on Seeking Alpha. Please do more research before making a false comment that Netflix lost connection to three studios.
"The story currently relating Warner Archive Instant to Netflix title availability is inaccurate. Warner Archive Instant is not involved in Netflix's business decisions and none of the titles that were pulled from Netflix yesterday are Warner Bros. owned. Further, Warner Archive Instant content is drawn solely from the Warner Bros Entertainment library and we are not streaming Universal, or MGM/ United Artists owned content on this site."
- Warner Archive
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
And there will be months where there is a net increase or a net decrease of total titles, along with higher quality titles (like originals and Disney content during the Pay TV window).
I appreciate you expanding your understanding but if you have been following these trends for some time, there is nothing particularly odd or unique about the content changes today.
Indeed - Here are the "Top Titles" that were removed today (from those trying to make this a story):
Beach Red (1967)
The Bed-Sitting Room (1969) and How I Won the War (1967)
Billion Dollar Brain (1967)
The Delinquents (1957), Thieves Like Us (1974), and Vincent & Theo (1990)
Dr. No (1962) and Goldfinger (1964)
Gregory’s Girl (1984)
Kes (1969) and Ladybird Ladybird (1994)
Kiss Me, Stupid (1964) and One, Two, Three (1961)
Marat/Sade (1967)
Never on Sunday (1960)
Odds Against Tomorrow (1959)
Stardust Memories (1980)
Honestly - other than the Bond movies, do you think anyone but the serious movie junkies are going to even miss not having those titles available?
When will the DVD business of Coinstar (CSTR -1.3%) become fully saturated? The answer depends on who you ask with Wedbush seeing revenue falling even as new kiosks are being added while B. Riley isn't so sure the lack of blockbuster films in Q1 isn't a big factor in Coinstar's sluggish DVD business. During its earning conference call, execs noted the company is taking back market share as competitors peel away and think Coinstar will continue to have an advantage in the market for new releases. (transcript) [View news story]
And yet Redbox revenue growth was nowhere near that amount, and same kiosk revenue was down.
Anyone else see a near term problem with this for Coinstar?
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
Each (Netflix and Amazon) pay for a bulk of content over a certain time period. That makes them fixed cost models. The cost of the content over a set period remains fixed regardless of the number of subs.
Of course, the number of subs may impact what content owners ask to get paid during negotiations, but that does NOT change that ultimately the costs are not directly associated to number of subs within a particular time period.
So Netflix (I will leave out Amazon for a second as how they value subs is different because of their retail business) can increase margins while maintaining or even increasing content by assigning a value on content based on their knowledge of subscriber preferences. That single piece (knowing how much their subs value certain content) gives them a strong advantage in content negotiations. And to be fiscally responsible, they can walk away from content if the owner is asking too much - and the content owners do NOT have that info so they are flying a bit blind in negotiations.
Coinstar, on the other hand, is like a cable channel. They pay a fixed rate per sub for that content. And take a look at how the relationship between cable companies and networks work. In that relationship, who controls pricing? In that relationship, does new content (or even maintaining content) come without any additional cost to the consumer?
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
Let's say they are paying Epix $2 per sub (probably not too far off the mark as that is probably what MSOs pay Epix for premium subs). That means for every Redbox Instant customer, $2 of revenue goes straight to Epix (just like how the MSOs pay the network providers).
So... $8 revenue, $4.80 allocated to discs leaves $3.20 for streaming minus $2 for Epix leaves $1.20 for costs, profits and content expansion. Even if you cut Epix down to $1.50, you are still only talking $1.70 per sub left for expansion.
Again... they have little room to add content without increasing prices or cutting margins.
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
Lower risk up front, but limited ability to add content without impacting margins or increasing price.
Paying a set price per paying sub is the MSO (cable and satt) model. And you need to look at that model to understand who controls pricing in that model.
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
There are far better offerings in absolutely every criteria. That is important to understand if you are looking at the impact the offering will have on the Redbox business.
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
Redbox Instant is worst in class in content, quality and device penetration.
Coinstar: Tablets Killed The Video Kiosk Star? [View article]
That means (like the MSO model), Redbox Instant will not be able to add new content without raising prices, lowering margins or both.
Keep in mind that if someone takes advantage of the 4 nights of DVD rentals, that means that the effective revenue per sub for Redbox Instant STREAMING is $3.20 per month. Even if CSTR/Verizon is only paying Epix $1.50 a month per user for Epix content, that is very little room to add new content without a significant impact on margins (whether you calculate that hit against the streaming side or the disc side).