Redbox 2013 Annual Report Download - page 11

2
We generate revenue primarily through fees charged to rent or purchase a movie or video game, and we pay retailers a
percentage of our revenue. Our content library, which we called our DVD library in prior years, consists of movies and video
games available for rent or purchase. We obtain our movie and video game content through revenue sharing agreements and
license agreements with studios and game publishers, as well as through distributors and other suppliers. Our goal is to achieve
satisfactory availability rates to meet consumer demand while also maximizing our margins. For additional information related
to our content license agreements with studios see Note 19: Commitments and Contingencies in our Notes to Consolidated
Financial Statements.
Coinstar
Within our Coinstar segment, we own and operate approximately 20,900 coin-counting kiosks (approximately 17,400 of which
offer a variety of stored value products to consumers) in 20,600 locations, where consumers feed loose change into the kiosks,
which count the change and then dispense vouchers or, in some cases, issue stored value products, at the consumer’s election.
We also have developed a limited number of kiosks that exchange gift cards for cash. Our Coinstar kiosks are available across
the U.S., where they provide a convenient and trouble-free service to retailers such as Kroger and Walmart, and in Canada,
Puerto Rico, Ireland and the United Kingdom. We are the only multi-national, fully automated network of self-service coin-
counting kiosks and are the leader in the U.S. market.
We generate revenue through transaction fees from our consumers and product partners. Each voucher lists the dollar value of
coins counted, less our transaction fee. When consumers elect to have a stored value product issued, the transaction fee
normally charged to the consumer for the coin-counting services is charged instead to the stored value product issuer.
New Ventures
We identify, evaluate, build or acquire and develop innovative new self-service concepts in the automated retail space in our
New Ventures business segment (“New Ventures”). We currently have kiosks in the marketplace that address the Electronics
and Beauty & Consumer Packaged Goods consumer sectors. New Ventures concepts are regularly assessed to determine
whether continued funding or other alternatives are appropriate. Subsequent to our acquisition of ecoATM in the third quarter
of 2013, results from ecoATM are included within our New Ventures segment results. See Note 3: Business Combinations in
our Notes to Consolidated Financial Statements for more information.
We generate revenue primarily within our ecoATM concept through the sale of devices collected at our kiosks to third parties.
Strategic Investments and Joint Venture
We make strategic investments in external companies that provide automated self-service kiosk solutions. Current investments
address the Health sector through our investment in Solo-Health, Inc. and the Entertainment sector through our Redbox Instant
by Verizon joint venture. See Note 6: Equity Method Investments and Related Party Transactions in our Notes to Consolidated
Financial Statements for more information and Note 3: Business Combinations for our acquisition of ecoATM, one of our
strategic investments.
Seasonality
We have historically experienced seasonality in our revenue from our Redbox segment. December and the summer months
have historically been high rental months, while September and October have been low rental months, due, in part, to the
beginning of the school year and the introduction of the new fall television season. However, we have entered into licensing
agreements with certain studios that contain delayed rental windows. This has shifted the availability of titles affected by the
delayed rental windows relative to historic patterns. Seasonal effects, however, may be minimized by the actual release slate
and the relative attractiveness of movie titles in a particular quarter or year. Our Coinstar segment generally experiences its
highest revenue in the second half of the year due to increased retailer foot traffic and holiday shopping in the fourth quarter
and an increase in consumers’ desire for disposable income in the summer months.
Employees
As of December 31, 2013, we had approximately 2,900 employees. Included in this total were approximately 1,950 field
service employees throughout the U.S. and internationally who have broadened our geographic reach to develop and maintain
strong relationships with retailers and service our kiosks. See Note 11: Restructuring in our Notes to Consolidated Financial
Statements for more information on certain workforce reductions across the Company during the fourth quarter of 2013.