Redbox 2013 Annual Report Download - page 12

Download and view the complete annual report

Please find page 12 of the 2013 Redbox annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 119

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119

3
Additional Business Information
See Note 16: Business Segments and Enterprise-Wide Information in our Notes to Consolidated Financial Statements as well as
Item 1A. Risk Factors for additional information related to our segments, intellectual property, competition, limited or sole
source suppliers, content, and geographic and significant business relationship information, which information is incorporated
herein by reference.
Where You Can Get More Information
We meet information-reporting requirements of the Securities and Exchange Act of 1934 by filing and furnishing to the
Securities and Exchange Commission (“SEC”) reports, including annual reports on Form 10-K, quarterly reports on Form 10-
Q, and current reports on Form 8-K, as well as amendments thereto. These reports and related materials are available at the
SEC website, www.sec.gov, and the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549. Information
on the operation of the SEC’s Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. We make these
reports and related materials available, as soon as reasonably practicable after we electronically deliver such materials to the
SEC, free of charge on the Investor Relations section of our website, www.outerwall.com.
ITEM 1A. RISK FACTORS
You should carefully consider the following risk factors that may affect our business, including our financial condition and
results of operations. The risks and uncertainties described below are not the only risks we face. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial also may impair our business. If any of the
following risks or uncertainties actually occurs, our business could be harmed, the trading price of our common stock could
decline and you could lose all or part of your investment in us.
Competitive pressures could seriously harm our business, financial condition and results of operations.
Our Redbox business faces competition from many other providers, including those using other distribution channels, having
more experience, greater or more appealing inventory, better financing, and better relationships with those in the movie and
video game industries, than we have, including:
• mail-delivery and online retailers, like Netflix or Amazon;
• cable, satellite, and telecommunications providers, like Comcast or DISH Network;
• traditional movie programmers, like HBO or Showtime;
• other forms of movie content providers like Internet sites including iTunes, YouTube, Hulu or Google;
• traditional brick and mortar video retailers, and other DVD kiosk businesses;
• other retailers like Walmart and other chain stores selling DVDs and video games;
• other forms of video game rental providers, like GameFly;
• noncommercial sources like libraries; and
• general competition from other forms of entertainment such as movie theaters, television and sporting events.
Our Coinstar business faces competition from supermarkets, banks and other companies that purchase and operate coin-
counting equipment from companies such as ScanCoin, Cummins-Allison Corporation and others. Our retailers may choose to
replace our coin-counting kiosks with competitor machines and operate such kiosks themselves or through a third party, or not
carry coin-counting kiosks at all deciding that floor space could be used for other purposes. In addition, retailers, some of
which have significantly more resources than we do, may decide to enter the coin-counting market. Some banks and other
competitors already provide coin-counting free of charge or for an amount that yields very low margins or that may not
generate a profit at all. An expansion of the coin-counting services provided or a reduction in related fees charged by any of
these competitors or retailer decisions to use floor space for other than coin-counting, could materially and adversely affect our
business and results of operations.
Our ecoATM business faces competition from companies whose primary business consists of the purchase of used electronics,
including online retailers and web sites such as Gazelle, as well as brick and mortar stores which buy back used electronics.
The business also faces competition from companies in other businesses who also have buyback programs, such as GameStop,
Best Buy, Target, Apple, AT&T, Verizon and Sprint. These competitors may have significantly more resources than we do or
offer their customers a higher price than we do for the same item. Both the proliferation of such programs and the perceived