Redbox 2014 Annual Report Download - page 11

3
PART I
ITEM 1. BUSINESS
Overview
We were incorporated in Delaware on October 12, 1993 and are a leading provider of automated retail solutions that offer
convenient products and services that benefit consumers and drive incremental retail traffic and revenue for retailers. In 2013,
we changed our name from Coinstar, Inc. to Outerwall Inc. Our core offerings in automated retail include our Redbox business,
where consumers can rent or purchase movies and video games from self-service kiosks (“Redbox” segment), and our Coinstar
business, where consumers can convert their coin to cash or stored value products at self-service coin counting kiosks
(“Coinstar” segment). Our New Ventures business (“New Ventures” segment) is focused on identifying, evaluating, building or
acquiring, and developing innovative self-service concepts in the marketplace.
Summary of Recent Divestitures and Acquisitions
The following is a summary of the acquisitions and divestitures that we made during the last five years:
Year Transaction
2010 • We sold our subsidiaries comprising our electronic payment business in the second quarter.
2011 • We sold our subsidiaries comprising our money transfer business in the second quarter.
2012 • We entered into a joint venture, Redbox InstantTM by Verizon (the "Joint Venture"), with Verizon Ventures IV
LLC (“Verizon”) in the first quarter. (1)
• We acquired NCR Corporation’s self-service entertainment DVD kiosk business in the second quarter.
2013 • We sold certain kiosks previously acquired from NCR through the sale of a previously consolidated entity in the
second quarter.(2)
• We acquired ecoATM, Inc. ("ecoATM") in the third quarter.(1)(3)
• We reclassified four concepts previously included in our New Ventures operating segment as discontinued
operations, Orango™, Rubi™, Crisp Market™, and Star Studio™, in the fourth quarter.(4)
2014 • We withdrew Redbox as a member of the Joint Venture in the fourth quarter.(1)
Additional information can be found in our Notes to Consolidated Financial Statements as follows:
(1) Note 5: Equity Method Investments and Related Party Transactions
(2) Note 17: Commitments and Contingencies
(3) Note 14: Business Segments and Enterprise-Wide Information
(4) Note 12: Discontinued Operations
Business Segments
Redbox
Within our Redbox segment, we operate 43,680 Redbox kiosks, in 36,140 locations, where consumers can rent or purchase
movies and video games. Our Redbox kiosks are available in every U.S. state, Puerto Rico, and Canada, and are installed
primarily at leading grocery stores, mass retailers, drug stores, restaurants and convenience stores including Walgreens,
Walmart, Kroger and 7-Eleven. Our Redbox kiosks supply the functionality of a traditional video rental store, yet typically
occupy an area of less than ten square feet. Consumers use a touch screen to select their titles, swipe a valid credit or debit card,
and receive their movie(s) or video game(s). The process is designed to be fast, efficient and fully automated. 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. Typically, the daily rental fee at a Redbox kiosk is a flat fee plus tax for each disc and, if the consumer chooses to keep
the movie or video game for additional days, the consumer is charged for each additional day at the same daily rental fee. Our
consumers can rent a movie or video game from one location and return their rental to any of our Redbox locations.
Additionally, our consumers may reserve a movie or video game online or via a smart phone application and pick it up at the
selected Redbox location.