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Redbox stands to gain million in incremental quarterly revenue as a result of the implosion of Movie Gallery/Hollywood Video, according to one analyst.
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Michael Pachter with Wedbush Morgan believes that this revenue boost should allow Redbox to reveal more than $297 million in Q2 revenue when parent company Coinstar announces its financials on July 29.

Regarding the Redbox revenue infusion from the closures of Movie Gallery and Hollywood Video locations, Pachter said the following:

“Given that the Gallery run rate was $1.8 billion just three years ago, the migration of its customers should have a positive impact on Redbox’s top line growth,”

Pachter was not nearly as sanguine, however, on the prospects of Redbox’s digital initiative that will purportedly be revealed in October, saying that it offers “no competitive advantage over [Netflix’s] Watch Instantly due to content restrictions imposed by several studios.” Said Pachter:

“The best Redbox can hope to do is play catch-up with an increasingly online-entrenched competitor,”

Just how much of a boost will Redbox receive from the demise of a major rival, Insiders? What kind of numbers are we going to be getting on Thursday from Redbox parent Coinstar?
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Place your bets now in the comments.

(via Home Media Magazine)

4 Responses to “Analyst: Redbox to Get $50 Million Q2 Gain from Movie Gallery’s Demise”

  1. Visitor [Join Now]
    Firstlawofnature [visitor]

    He’s too aggressive on the benefit. It will take time to pick up those customers. In addition the liquidation sales have the opposite effect in the short-term as demand gets dampened from millions of cheap DVDs hitting the streets. No benefit and probably some downside for the 2nd quarter regarding movie gallery. Slow release schedule and first cycle on the 28 delay won’t help either. I think Q2 will be tough for redbox.

    On the other hand I think redbox has a real shot on the digital initiative. By definition it’ll be different than netflix given redbox has a very different physical model to leverage off of.

    The easiest prediction is as follows: no matter what happens in Q2 JS will state that the results prove that redbox is doing poorly.

  2. Visitor [Join Now]
    John Small [visitor]

    Why thank you for considering me such a guru of the industry FLON. It is nice to see that you have finally come around and have seen the light.

    My biggest complaint, in regards to converting Movie Gallery customers to Redbox customers, is that Coinstar is taking $200 million worth of revenue and turning it into $50 million. So much money is being left on the table.

    Regardless of the rabble on this board that whine incessantly about having to pay more than a dollar, Redbox now has the advantage of convenience and location nd should leverage those. A jump to $2.00 for the first day and $1.00 for every extra day would definitely go a long way to making Coinstar a profitable company.

    Such a shame that they have gone the cheap route. Only doom lies within that path.

    And FLON, even you have to admit that if Coinstar only hits 297M in revenue for the quarter, that does not look good on paper.