CoinStar

LeaderAmanda Brunssen, Justin Gonner, Staci SullivanWHO??

OverviewCoinstar, Inc. is a provider of automated retail solutions, which offers convenient products and services.The companys offerings include its Redbox business, where consumers can rent or purchase movies and video games from self-service kiosks and its Coin business, where consumers can convert their coin to cash or stored value products at self-service coin counting kiosks. Its New Ventures business is focused on identifying, evaluating, building, and developing self-service concepts in the marketplace.The company has approximately 33,300 DVD kiosks and 18,900 coin-counting kiosks in supermarkets, drug stores, mass merchants, financial institutions, convenience stores, and restaurants.Cstr ContMarket Cap- 1.59 billionNo expected splits in the near futureDo not pay a dividend. Retain all future earnings to fund development and growth.Retire debt obligationsBuy back common stock

Whats going on in the industryNetflix ended an exclusive deal with EpixAmazon just made a 3 year deal with will contribute 3000 movies to its video streaming serviceNetflix-$96/year subscription, Amazon-$79/year subscriptionEpix may join forces with Apple and GoogleGoogle users could access Epix streaming through AndroidApple users could access Epix streaming through iPhones and iPads, etc.

SWOT AnalysisStrengths-Redboxes in nearly every city, 24 hours.ConvieneceHigh brand awareness through strategic placement in mass retailersInexpensive, appeals to a large target segmentWeaknesses-Majority of revenue comes from Redbox.Does not use TV, print or other innovative marketing channelsOpportunities-Currently dont pay dividends. Other 4th wall placements such as dollar storesDiversifyThreats- Licensing agreements with movie studios being terminated before the contract lengthCashless societyFree ways of watching movies such as youtube or illegal websitesCompetitorsNetflix- Started in 1999. Offers streaming and expanding in the international marketMore than 7000 moviesLong wait for new releasesPoor customer serviceBlockbuster- Been around since 1985Can return any online order to local blockbuster storesNeed two separate accounts to rent online and in the storeMovies rented in the store cannot be returned by mail

Cstr Competitive advantageRedbox and Verizon are teaming up to offer an online streaming service to directly compete with NetflixNew customer and product segments, offering to new geographies with the online streamingVerizon controls the pipeline for 14% of U.S. households through internet and telephone servicesOnly taking a majority stake in the new venture. Verizon controls 65% and CSTR initial investment is $14 million which is not much for a $2 billion companyAvailable to access 24 hours a dayDont have to sign up for a membershipIf you forget to return the DVD the next day it is only another $1 for each day you have it

HistoryJens Molbak, founder of Constar, was a graduate student at Stanford University when he came up with the idea. Two years after he thought of the idea, two classmates joined him to make Coinstar successful. They creating a machine that could quickly count change and filter out the foreign coins, screws, paper clips, and other debris that is often found in piggy banks and coin jars.

History continued1992 is when the machine was going to be tested in the real world and the first machine was installed in four supermarkets in San Francisco. Consumers loved the coin machines and now today they are found in grocery stores, drug stores, and other locations across the United States where people shop or go by. In 2001 Jen stepped down as chairman of the company but still remains within the company. History continuedIn 2002 a division of McDonalds developed the first Redbox. Coinstar executives recognized the alignment with its automated retail strategy and they made an investment in 2005. In 2009 they completed their acquisition and since then Redbox has grown to be one of the top movie rental companies.

More HistoryIn 2010, Redbox made Blu-ray Discs available and then one year later video games became available.in 2012, Redbox has over 2 billion total units rented.The Redbox consumer base is continuing to grow and also there is mobile apps available that makes it easy for people to get movies and game on the go. Coinstar continues to explore and test new automated retail solutions that will make consumers lives easier.

Do You know your coinstar?How many Redboxs are in Dubuque and where are they located?

How many Coinstars are in Dubuque and where are they located?

Answers Redbox: 12Walgreens 20th street (2)Hy-Vee at Locus Street (2)Walgreen's on JFK (4)Hy-Vee dodge street (1)Wal-Mart (1)Hy-Vee at Asbury (2)

CoinStar: 1Walmart (1)

CEO, Paul DavisPaul joined Coinstar in April 2008 as chief operating officer In 2009 he became the chief executive officer He serves on Coinstars Board of Directors. Global business leaderPaul brings 30 years experience in retail and consumer packaged goods. Past experience, various sales and executive management positionsChief executive of Kettle FoodsPresident of Starbucks North AmericaPresident of PepsiCos Frito-Lay Company in Canada.Also various positions with Procter and Gamble.

President and Chief Operating Officer, Gregg KaplanIn 2009, Gregg joined Coinstar as president and chief operating officer Past experienceChief executive officer of Redbox Automated Retail, LLC, the leading DVD rental kiosk company, which is now a wholly-owned subsidiary of Coinstar. McDonalds Corporation working in strategy and business development group he helped McDonalds create and build new businesses. Greggs other experience includes:working as an investment banker at Furman Selz where he focused on corporate transactions of media and entertainment companies.

Chief Financial Officer, J. Scott Di ValerioJanuary 2010, Scott joined Coinstar.In March 2011 he became chief financial officer.In addition to his leadership of the finance organization, Scott also leads the companys corporate information technology and supply chain functions. He has over 25 years finance, operations and management experience. Past ExperiencePresident of the Americas for the Lenovo Group Limited (a leading computer manufacturer).Senior positions at Microsoft Corp. as corporate vice president of Microsofts OEM division and as corporate vice president of finance and administration and chief accounting officer.Management positions at The Walt Disney Company and Mindwave Software Inc.Partner at PricewaterhouseCoopers.

Financial Statement

NFLX

No

Cstr Market status

CSTR has the lowest PEG ratio in the Specialized Consumer Services Industry

Investor questions

21Easy, Fast, and Incredibly Convenient.Great PEG (.57) ratio and EPS. Best in the industryTop growth stock in the industry. LEADERSmall market cap with plenty of room to grow and other markets to expand.How many have rented a DVD in the last 6 months?Streaming issues? How many people actually stream?

Hold!