Leader

1. Leader

2. WHO?? Amanda Brunssen, Justin Gonner, Staci Sullivan

3. Overview • Coinstar, Inc. is a provider of automated retail solutions, which offers convenient products and services. • The company‘s 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. 

4. CstrCont… • Market Cap- 1.59 billion • No expected splits in the near future • Do not pay a dividend. • Retain all future earnings to fund development and growth. • Retire debt obligations • Buy back common stock

5. What’s going on in the industry • Netflix ended an exclusive deal with Epix • Amazon just made a 3 year deal with will contribute 3000 movies to its video streaming service • Netflix-$96/year subscription, Amazon-$79/year subscription • Epix may join forces with Apple and Google • Google users could access Epix streaming through Android • Apple users could access Epix streaming through iPhones and iPads, etc.

6. SWOT Analysis • Strengths-Redboxes in nearly every city, 24 hours. • Convienece • High brand awareness through strategic placement in mass retailers • Inexpensive, appeals to a large target segment • Weaknesses-Majority of revenue comes from Redbox. • Does not use TV, print or other innovative marketing channels • Opportunities-Currently don’t pay dividends. • Other 4th wall placements such as dollar stores • Diversify • Threats- Licensing agreements with movie studios being terminated before the contract length • Cashless society • Free ways of watching movies such as youtube or illegal websites

7. Competitors • Netflix- Started in 1999. • Offers streaming and expanding in the international market • More than 7000 movies • Long wait for new releases • Poor customer service • Blockbuster- Been around since 1985 • Can return any online order to local blockbuster stores • Need two separate accounts to rent online and in the store • Movies rented in the store cannot be returned by mail

8. Cstr Competitive advantage • Redbox and Verizon are teaming up to offer an online streaming service to directly compete with Netflix • New customer and product segments, offering to new geographies with the online streaming • Verizon controls the pipeline for 14% of U.S. households through internet and telephone services • Only 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 company • Available to access 24 hours a day • Don’t have to sign up for a membership • If you forget to return the DVD the next day it is only another $1 for each day you have it

9. History • Jens 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 Coinstarsuccessful. • 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.

10. History continued… • 1992 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.

11. History continued… • In 2002 a division of McDonald’s 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 Redboxhas grown to be one of the top movie rental companies.

12. More History • In 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.

13. Do You know your coinstar? • How many Redbox’s arein Dubuque and where are they located? • How many Coinstars are in Dubuque and where are they located?

14. Answers • Redbox: 12 • Walgreens 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: 1 • Walmart (1)

15. CEO, Paul Davis • Paul joined Coinstar in April 2008 as chief operating officer • In 2009 he became the chief executive officer • He serves on Coinstar’s Board of Directors. • Global business leader • Paul brings 30 years experience in retail and consumer packaged goods. • Past experience, various sales and executive management positions • Chief executive of Kettle Foods • President of Starbucks North America • President of PepsiCo’s Frito-Lay Company in Canada. • Also various positions with Procter and Gamble.

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

17. Chief Financial Officer, J. Scott Di Valerio • January 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 company’s corporate information technology and supply chain functions. He has over 25 years finance, operations and management experience. • Past Experience • President of the Americas for the Lenovo Group Limited (a leading computer manufacturer). • Senior positions at Microsoft Corp. as corporate vice president of Microsoft’s 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.

18. Financial Statement NFLX No

19. Cstr Market status CSTR has the lowest PEG ratio in the Specialized Consumer Services Industry

21. Investor questions

22. “Easy, Fast, and Incredibly Convenient.” • Great PEG (.57) ratio and EPS. Best in the industry • Top growth stock in the industry. LEADER • Small 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?

23. Hold!