Verizon Video Venture and Coinstar Funding
Jeff Rath – Canaccord Genuity asked: Just a few questions.The first one is on the video stream or your video joint venture with Verizon (NYSE:VZ). I know you are holding off on more details as it relates to the service offering, but in your filing there was some wording around Coinstar needing to maintain 35 percent of the capital investment required going forward or face incremental dilution.
How would you describe Coinstar’s appetite to fund this on a going forward basis? I am sure there are a lot of variables that go into it, but are we thinking large dollars or how can you articulate that on a going forward basis?
J. Scott Di Valerio – CFO responded: I think couple of things. Certainly as you saw in the filings, and in the ads, I think we are not going to be giving a lot of detail around the work into the JV, the offerings and those kinds of things.
We wanted to make sure we are investing at the right levels and getting the right returns that we expect to get on those investments We will continue down that path.
The other thing to consider is the JV should be generating revenues in those kinds of things which will help fund and drive whatever operations including acquiring content on the JV as we move along and drive that business.
We feel good about our partnership Verizon. We feel good about the fact that we went through a real structured process to get to this point.
As we get out and closer to launch, we’ll be providing details around the product and different things. We certainly will provide any necessary updates at that point in time.
$1 Coinstar Redbox Specials
Jeff Rath – Canaccord Genuity asked: In your scripted remarks Paul, you said that Coinstar Redbox successfully introduced $1 specials to ease the transition in the pricing. Can you give us some specifics here? I am just trying understand how much of the quarter that we saw the full impact on the revenue line from the incremental price increase.
Paul Davis – CEO responded: I don’t know if I can give you the specific numbers, but I can tell you the promotion itself was designed to be a bridge. For consumers that reserved online, so think about over your iPhone (NASDAQ:AAPL), your Android (NASDAQ:GOOG), when they did so, they could book online at a $1. That was an important part of the bridge, but I would not say it was a big part of our revenue performance.
We anticipated a certain revenue nit as a result of the price increase and we tried to be conservative with our forecast. Actually the quarter based on the strong slate of titles and the performance of the businesses, outperformed what we originally forecasted which was good news.
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