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Redbox kiosks could take a beating from streaming services

April 10, 2013

Redbox kiosks may already have taken a big blow from video streaming services, bizjournals.com reported. The company's first quarter ended on March 31, during which some analysts estimate it saw a 16 percent drop in revenue per kiosk.

Average revenue per kiosk is expected to decline 7 percent in the second quarter, with lackluster new releases hurting Redbox's outlook.

"Redbox weakness since Q3 has only fueled the bear argument that discs are quickly going the way of the Dodo," said B.Riley & Co. analyst Eric Wold. "With the Blockbuster kiosk transition in the past, more targeted marketing strategies and better inventory management (including the implementation of the kiosk capacity enhancements), we would expect to see Redbox rental patterns begin to stabilize in Q2 and put an end to the recent double-digit declines in average revenue per kiosk."

Redbox reports Q1 results on April 25.

Read more about DVD kiosks.