Redbox 2010 Annual Report Download - page 21

Events outside of our control, including the current economic environment, has negatively affected, and could
continue to negatively affect, consumers’ use of our products and services.
Our consumers’ use of many of our products and services is dependent on discretionary spending, which is
affected by, among other things, economic and political conditions, consumer confidence, interest and tax rates,
and financial and housing markets. With economic uncertainty affecting our potential consumers, we may be
impacted by more conservative purchasing tendencies with fewer non-essential products and services purchases
during the coming periods if the current economic environment continues. In addition, because our business
relies in part on consumers initially visiting retailers to purchase products and services that are not necessarily
our products and services, if consumers are visiting retailers less frequently and being more careful with their
money when they do, these tendencies may also negatively impact our business.
Further, our ability to obtain additional funding in the future, if and as needed, through equity issuances or loans,
or otherwise meet our current obligations to third parties, could be adversely affected if the economic
environment continues to be difficult. In addition, the ability of third parties to honor their obligations to us could
be negatively impacted, as retailers, suppliers and other parties deal with the difficult economic environment.
Finally, there may be consequences that will ultimately result from the current economic conditions that are not
yet known, and any one or more of these unknown consequences (as well as those currently being experienced)
could potentially have a material adverse effect on our financial condition, operating results and liquidity, as well
as our business generally.
Lack of consumer confidence, whether real or perceived, in our coin-counting machines could harm our
business.
The accuracy of the coin-counting functionality of our machines is important to consumers and our retailers. The
failure to maintain consumer confidence in our technology and systems could harm our business. Our inability to
collect the data from our coin-counting machines could lead to a delay in processing coins and crediting the
accounts of our retailers for vouchers that have already been redeemed. Any inaccuracy, loss or delay in
collecting or processing coin data could seriously harm our operations.
Our future operating results may fluctuate.
Our future operating results will depend significantly on our ability to continue to drive new and repeat use of
our DVD and coin-counting kiosks, our ability to develop and commercialize new products and services and the
costs incurred to do so, and our ability to successfully integrate newer lines of business into our operations. Our
operating results have a history of fluctuating and may continue to fluctuate based upon many factors, including:
• fluctuations in revenue generated by our DVD and Coin Services businesses;
• fluctuations in operating expenses, such as the amortization of our DVD library, and transaction fees
and commissions we pay to our retailers;
• our ability to establish or maintain relationships with significant retailers and suppliers on acceptable
terms;
• the amount of service fees that we pay to our retailers;
• the transaction fees we charge consumers to use our services;
• fluctuations in consumer rental patterns, including the number of movies rented per visit, the type of
DVDs they want to rent and for how long, and the level of DVD migration between kiosks;
• the successful operation of our network;
• the commercial success of our retailers, which could be affected by such factors as general economic
conditions, severe weather or strikes;
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