Outerwall, the Washington-based company that own Redbox and Coinstar announced yesterday that the last day for Redbox rentals will be next Friday, Feb. 13, and that the last day you can return rented movies will be March 5.
The kiosks are “not meeting the company’s performance expectations,” explained Outerwall in its latest earnings report.
Is the Canada closure a harbinger of things to come in the U.S.?
Redbox revenue in general is down — $494 million in the last quarter, compared to $496.4 million for the same quarter a year ago — even though the company raised rates in December. Outerwall puts some of the blame on “a challenging release schedule for much of 2014.”
The service did pass the milestone of renting its 4 billionth disc, and says it extended its content agreements with Sony, Paramount and Universal while reaching a new deal with Lionsgate.
The company also claims that the the last week of 2014 “marked the highest rental week in Redbox history,” though it doesn’t say if that was highest in terms of volume or revenue.
And though 2014 saw the end of the Redbox/Verizon streaming partnership, the company seems to believe that the rate hike will help it continue to sell disc-based media.
“The recently implemented Redbox price increase will support further investments in several initiatives to enhance customer experience and drive engagement,” reads the earnings report. “We expect these initiatives will help offset the secular decline in the physical rental market and that our actions to improve operational efficiencies and network optimization will help drive earnings growth.”