Redbox doubles spending to add 1,500 new kiosks in 2017
Redbox plans to double its capital spending in 2017 and expand its nationwide DVD rental kiosk footprint, CEO Galen Smith Galen told Variety.
This year, Redbox will spend $40 million (up from $20 million last year) to add 1,500 new kiosks across the U.S. to its current base of 40,000, along with other technology investments. The company plans to add even more in 2018. The moves marks a reversal for the company, which removed 1,800 kiosks from service in 2015 and retired less than 1,000 last year.
Redbox revenue has declined for the last several years as rental volume has dropped. Analysts expect the business to continue to shrink in the years ahead.
Smith said Redbox as a private company has been able to invest in its operations in a way that is not focused on meeting Wall Street's financial expectations. Private-equity firm Apollo Global Management acquired Outerwall, Redbox's parent company, for $1.6 billion last fall. Apollo has split Outerwall's three segments into distinct businesses so that Redbox is now separate from Coinstar and ecoATM.