Coinstar Inc.'s (CSTR) witnessed its profit figures almost double in Q2, the positive results triggered by the rapid growth of its Redbox DVD movie-rental business recorded over the past year.
However, the company’s recorded its DVD kiosk sales marking a downfall as compared to its first quarter figures, with its results disappointing the company expectations, which were already lowered.
The company soon realized that its recent contracts signed with some movie studios over delaying the release of some latest DVDs on rentals is actually hampering their business.
DVD rentals suffered from the greatest pinch, as kiosks didn't have any new releases coming up for a few weeks, and the older ones failed to drive the store.
Chief Financial Officer, J. Scott Di Valerio claimed that besides the agreements, the shift witnessed due to the Easter holiday weekend into the first quarter and a string of weak movie titles coming up have also contributed to the plunge.
Coinstar Inc. said its Redbox unit, which is a DVD rental kiosk provider, has initiated to retail its Blu-ray titles at about 13,300 kiosks across the country stores.
Also, it has estimated that it will have Blu-ray discs in all of its 23,000 kiosks due to the plunge.