That’s in essence what caused weak revenues at Redbox during the third quarter, with the movie rental service’s parent company Outerwall disclosing financial results today. Redbox, the biggest part of Bellevue-based Outerwall, said its revenues declined 11 percent during the third quarter due to “a weak release schedule in the second quarter of 2014 and the unfavorable timing and mix of content released in the third quarter of 2014.”
Redbox posted revenue of $438 million, down from $491.7 million for the same period last year.
Overall, Outerwall — which also operates Coinstar and ecoATM kiosks — posted revenue of $552.9 million, a 5.7 percent revenue gain during the quarter. Net income for the quarter was $17.9 million, down from $82.7 million for the same period last year.
“We made substantial progress on a number of fronts during the third quarter, including the disciplined execution of our initiatives to improve efficiency,” said Outerwall CEO J. Scott Di Valerio, Outerwall’s in a release. “Our focus on managing Outerwall for profitability is driving tangible results, including solid core adjusted EBITDA from continuing operations and improvement of operating margins.”
The earnings report comes a few days after Outerwall and Verizon dissolved a streaming video partnership, one which failed in part because the companies could not gain ground against Netflix. The shut-down of Redbox Instant by Verizon will not have a material impact on the company in the fourth quarter. The company invested $77 million in the joint venture, and got back $70.5 million, including $16.8 million cash payment due in the fourth quarter.
Outerwall is pushing forward with expansion of its ecoATM kiosk line, with the company saying that it installed more than 530 during the quarter and inked several new retail partnerships. EcoATM allows consumers to exchange old smartphones and tablets at kiosks for cash. There are now roughly 1,510 ecoATM machines in operation, with the company saying that the unit should reach profitability some time next year.
Outerwall purchased ecoATM last year, paying $350 million in cash.
Shares of Outerwall dropped slightly in after-hours trading, falling to $56.26. They are down 15 percent this year. The company now has a market value of $1.09 billion.