Coinstar’s Redbox Continues to See Increased Traction (CSTR)

Coinstar Inc. (NASDAQ: CSTR) reported earnings after the bell today that missed the Street’s consensus on both the top and bottom lines. Shares are currently in decline, off some 8.30% in the after-hours.

What was encouraging though was the performance of the company’s DVD business, otherwise known as Redbox. The company said that their increase in quarterly revenues year over year was due primarily to increased sales on the Redbox line, which increased by 43.9%.

The company said that they would be investing more money in the Redbox concept as well, raising its cash paid for capital expenditures by $14.5 million (37.8%) year over year.

CSTR also announced today that Redbox kiosks would now begin carrying Blu-ray Discs for populat titles at a charge of $1.50 per night plus tax. They expect to have full availability in its network of some 23,000 kiosks by the fall.

According to a recent report by the Digital Entertainment Group, sales of Blu-ray players increased 103 percent in the first half of this year. The sale of almost two million set-top players during this time has increased the total number of Blu-ray players sold to an estimated 19.4 million, resulting in more consumers entering the Blu-ray rental market.