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In recent years, Coinstar has seen its Redbox DVD rental business overtake its eponymous coin exchange kiosks as the company’s primary source of revenue. Some in the industry have wondered if Coinstar has become too dependent on its Redbox business and wonder how the company’s namesake coin business will fit into its future model.

Redbox COO Gregg Kaplan says that not only is there room under the Coinstar umbrella for both DVD and coin operations, but that the strategies for both businesses are essentially identical. Says Kaplan:

“There’s a consensus strategy that is really the same strategy for both companies,” he said. “It’s one and the same now.”

According to Kaplan, before Redbox achieved the massive installed base that it enjoys today, Coinstar’s strategy focused on leveraging retailers’ “fourth wall” (the front of the store containing shopping carts and vending machines) and aimed to “fill the fourth wall with profitable offerings” based on self-service technology. Says Kaplan of the previous strategy:

“Coinstar would bring to the client other products and services and benefit the store,”

Since the massive growth of the Redbox brand, Kaplan says Coinstar has focused its strategy somewhat:

“We don’t want to do just anything on the fourth wall,” Kaplan said. “We want to do something that leverages our core competencies . . . It’s a narrower strategy than where Coinstar was, but I think it’s a more robust one and I think it’s going to work out very well.”

Kaplan says that thanks to competencies developed from Coinstar’s coin kiosks and recent Redbox success, his company is now “actively pursuing new verticals that bring high-end self-service to new markets.”

The Redbox COO also acknowledges that the time is coming when his company will have to shift away from disc rentals:

“We recognize openly that there will be a day when physical media will probably start to face some headwinds from new technology . . . Our plan is to be shifting with it, leveraging the Redbox brand.”

Will Coinstar’s strategic integration of its two primary businesses pay off for the company, Insiders? What new “high-end self-service” offerings to you think the company has in store? Guess away in the comments.

(via Self Service World)

2 Responses to “Redbox COO: Our Strategies for DVD and Coin are the Same”

  1. Visitor [Join Now]
    Vernon Dent [visitor]

    Gregg Kaplan:
    1. …“actively pursuing new verticals that bring high-end self-service to new markets.”

    2. “We recognize openly that there will be a day when physical media will probably start to face some headwinds from new technology . . .Our plan is to be shifting with it, leveraging the Redbox brand.”

    Translation:
    1. We are clueless as to what Coinstar is going to do next.

    2. Brand parasitism is our future. Maybe like Blockbuster, Coinstar could sell carbonated-soft drinks and candy via the redbox “fourth wall”.

  2. Visitor [Join Now]
    Deborah [visitor]

    I think technology is changing so fast that Redbox would definitly have to come up with something new to stay in business. As for Coinstar, there will always be loose change to cash out with.