Redbox Instant just couldn’t make it in the streaming video world against Netflix, Amazon and others, and that’s why Bellevue-based Outerwall and telecom giant Verizon announced plans to end the service earlier this month.
Now, we’re getting some insights into the nuts and bolts of the Redbox Instant business. A SEC filing released today indicates that Outerwall’s Redbox unit formally withdrew from the joint venture effective Oct. 20th, with the filing showing a business that wasn’t gaining much traction.
As part of the withdrawal agreement, Outerwall’s Redbox is receiving payment of $16.8 million.
The filing indicates that Outerwall made a total cash contribution of $77 million to the Redbox Instant joint venture, and received total cash back of $70.5 million (including the $16.8 million payment and revenue it received from the rental of DVDs and Blu-Ray discs through the joint venture).
Outerwall said that it expects to realize $29.9 million in cash tax savings through deductions from its share of the joint venture’s losses through Sept. 30.
“Outerwall does not expect a net material financial impact resulting from the extinguishment and expense reimbursement,” the company wrote in the SEC filing. “Neither Redbox nor Outerwall will take part in any material manner with the Joint Venture or in the winding down of Redbox Instant by Verizon following the withdrawal.”
Shares of Outerwall are down 15.9 percent this year, and they sagged again today. The company, which operates the Coinstar coin-counting kiosks in addition to the Redbox movie rental kiosks, is now valued at $1.1 billion.