logo
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

 

Equities – Your destination to connect with the growth investment community.

How Much Longer Can Physical Media Hold On?

  +Follow July 30, 2013 8:56AM
Share:
Tickers Mentioned:

On July Outerwall Inc. ($OUTR), formerly Coinstar, Inc posted extremely disappointing earnings for the second quarter of 2013. . The shortfall wasn’t attributable to the namesake Coinstar change-to-cash machines, but rather the company’s DVD rental kiosk subsidiary, Redbox. First quarter earnings were even worse, with a 58 percent plunge in earnings. This crash coincided with the company’s name change, and a shift in focus away from physical media. Following the disappointing Q2 earnings report, the stock dropped over 13 percent.

The company is working on transitioning into other arenas, like kiosks that dispense coffee, but the sagging profits of their flagship Redbox business points to one undeniable trend: physical media is on its way out. Across the board, physical retailers are losing out to their digital counterparts.

DVDs

Redbox provided a less costly alternative to traditional rental outlets like Blockbuster, but they still couldn’t claw their way to profitability. On the surface, it would seem the company is doing well, as their numbers rise while Netflix Inc's (NFLX) physical media division withers. While Netflix's DVD business dropped 475,00 subscribers to hit 7.1 million in Q2 2013, sales rose for Redbox, with a 4.1 percent uptick. But this couldn’t offset rapid expansion. Redbox found that people are checking out fewer moves from kiosks, and for a shorter amount of time, further driving down profits.

Netflix isn't batting an eye. Their streaming business tacked on 675,000 subscribers to hit 29.8 million total. As streaming now accounts for over four times as many subscribers than mail digital is their undeniable bread and butter now.

Books

Borders went the way of the dodo in 2011. The remaining mega-bookstore Barnes and Noble Inc. (BKS) saw the writing on the wall and decided to try to get into the e-reader game. The move into hardware was a risky one, and it didn’t pay off: the company’s Nook has so far failed to take off.

While Nook was nowhere near as popular as Amazon’s (AMZN) Kindle, The big question is whether consumers really want an e-reader at all, when the preference for hardware favors tablets made by Samsung, Google Inc (GOOG) , and Apple Inc (AAPL) . And Barnes and Noble has practically zero chance of ever competing with those tech giants.

In Q2 2013 the company reported a net loss of $119 million, double the previous quarter.

Video Games

Video game seller GameStop Corp (GME) got some good news on June 20 when Microsoft  Corp (MSFT) announced they would relax rules for using previously owned games on the Xbox system. It was a capper on an uptick that had seen the company regains form. GameStop hit its high of 64.41 on December 17, 2007, and then crashed down to almost $21 a share by the end of 2008.

But since then, the retailer has exploded. It can’t be ignored that GameStop stock has surged this year, and is up a whopping 78.49 percent on the year. This can be attributed to two factors: one, Xbox’s backtracking on a previous commitment to curbing used-game sales and allowing freer trade of physical media; and the recession pushing more people into buying used games.

But despite the uptick, sales of physical media overall are dwindling for the company. The end of their 2012 fiscal year on January 2013 saw them report a drop in overall sales of 7 percent, while mobile and digital sales were up 21.2 percent.

The company cited a “tough video game market,” and had previously reported they were shuttering 200 stores.  

CDs

Perhaps no sector of physical media has gotten the press music has, as it was the first sector to experience significant online streaming and piracy. But Napster isn't what put Tower Records out of business; it was a general shift to digital that the physical music companies were too slow to pick up on. Again, Apple picked up the slack where physical retailers didn't, as their iTunes capitalized on the switch to digital.

Interestingly, some music retailers have been able to turn things around by profiting off one thing that definitely can't be transferred into digital: real estate. Trans World Entertainment (TWMC) , which owns the chain f.y.e, made a land deal in South Florida that netted the company a $22 million dollar profit. That same year, holiday sales dropped 17 percent from the year prior.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Signup for our daily newsletter and get our best articles emailed right to you!

Results for OUTR
Capital Market Labs
24 Apr 15 14:04:41
$BKS vs. $GNC vs. $OUTR vs. $SBH Compared Across 9 Critical Measures http://t.co/ueZG6DfBgX http://t.co/5KmEeYavtP
Capital Market Labs
24 Apr 15 12:06:09
$BKS vs. $OUTR vs. $DKS vs. $SBH Compared Across 9 Critical Measures http://t.co/VzfutqZsUV http://t.co/H7rLM5BQhP
Syed Waqas Nabi
24 Apr 15 11:00:46
A bullish Big MAC (Bullish) has occurred at 1:30 PM Apr 24 at $70.61 on Outerwall Inc (OUTR) $OUTR
Capital Market Labs
24 Apr 15 10:29:35
$BKS vs. $OUTR vs. $MIK vs. $DKS Compared Across 9 Critical Measures http://t.co/174g58bMQ9 http://t.co/0KxcDeo4WV
Capital Market Labs
24 Apr 15 08:05:30
$GNC vs. $SBH vs. $VSI vs. $OUTR Compared Across 9 Critical Measures http://t.co/hTadhx0VPa http://t.co/3pHGd72xKA
Barbara Negrescu
24 Apr 15 04:32:24
RT @SmCapStrategist: Most searched small-cap stocks, Wed Apr 22nd - $YDLE $MEIP $ECOM $TASR $OUTR $GBSN $GWPH $HYGS - More: http://t.co/1zn…
ProTradersNews
24 Apr 15 04:20:04
$CAT $OUTR: Eye Catching Stocks: Caterpillar Inc. (NYSE:CAT), Rite Aid ...: http://t.co/FOUQVVVky5
Capital Market Labs
24 Apr 15 00:29:42
$SBH vs. $ULTA vs. $OUTR Compared Across 9 Critical Measures http://t.co/5bePgReg10 http://t.co/HnyPt2x8eO
Capital Market Labs
23 Apr 15 23:39:30
$BKS vs. $OUTR vs. $GNC vs. $DKS Compared Across 9 Critical Measures http://t.co/oG0Uxu87Cz http://t.co/RrL5KC7eFM
Capital Market Labs
23 Apr 15 21:29:24
$MIK vs. $GNC vs. $OUTR vs. $DKS Compared Across 9 Critical Measures http://t.co/E4nxBcr5YX http://t.co/PLOwHerDte
Rosner Stocks
23 Apr 15 15:32:38
$OUTR Stock Price Updated Thursday, April 23, 2015 5:59:26 PM $MU $AKS $MTL $SMN http://t.co/4h51WLqNMR
PolgarStocks
23 Apr 15 14:32:09
$OUTR Financials Updated Thursday, April 23, 2015 5:07:19 PM $T $SCO $UNP $YGE http://t.co/gKYXmsRfqk
Emylers
23 Apr 15 12:33:36
$MJN Summary Click Here: http://t.co/grIZ3fMMm9 Also See: $OUTR $TPX $HAR $VMGI ~
Emylers
23 Apr 15 12:21:37
$ZNGA Ex-Div Date Click Here: http://t.co/GZiKlhVlHQ Also See: $FLTX $TYPE $OUTR $ADXS ~
Jake13
23 Apr 15 11:52:36
$HES Message Board Posts Click Here: http://t.co/DvgyaQmxGs Also See: $VLO $FLS $PVG $OUTR ~
IH News Desk
23 Apr 15 10:17:11
$OUTR Investor Opinions Updated Thursday, April 23, 2015 1:11:15 PM $TMF $EWD $TLT $FDN http://t.co/riLYL2wEcI
jim50
23 Apr 15 10:10:24
Do you follow $RIG Click Here: http://t.co/7i4UPeeQJk Also See: $IBKC $BBD $RL $OUTR ~
Jake13
23 Apr 15 09:58:57
$DANG Financials Click Here: http://t.co/8J5QcZLRlz Also See: $OUTR $WPPGY $RGR $SAFM ~
Hedge Fund Buys
23 Apr 15 09:56:36
Motiwala Capital - Q1 2015 Letter To Investors http://t.co/exz6L2cgPB $BCOR $BEN $BMO $CNRD $GOOG $MNDO $NADL $OUTR $STX $VIAB $VZ $WDC
Seeking Alpha
23 Apr 15 09:56:35
Motiwala Capital - Q1 2015 Letter To Investors http://t.co/OInXRDYUdH $BCOR $BEN $BMO $CNRD $GOOG $MNDO $NADL $OUTR $STX $VIAB $VZ $WDC
Langan Stocks
23 Apr 15 09:55:09
$FUN Stock Message Board Updated Thursday, April 23, 2015 12:03:20 PM $AMZN $SREH $UA $OUTR http://t.co/xxjjSQmkM7
Langan Stocks
23 Apr 15 08:54:40
$EWD Last Price Updated Thursday, April 23, 2015 11:03:20 AM $AXP $AAPL $MVIS $OUTR http://t.co/NhnMv5YRUd
Rosner Stocks
23 Apr 15 07:53:06
$GBGM Percent Change Updated Thursday, April 23, 2015 09:59:22 AM $CAT $CLR $OSLH $OUTR http://t.co/XJTtU1pebc
PolgarStocks
23 Apr 15 06:57:42
$XOM Stock Message Board Updated Thursday, April 23, 2015 09:07:13 AM $OUTR $SPDC $AMZN $EWH http://t.co/jSXF0Vl4w7
PolgarStocks
23 Apr 15 05:57:18
$TNA Financials Updated Thursday, April 23, 2015 08:07:19 AM $OUTR $OSLH $EEM $VLTC http://t.co/KJGVFk3i42
PolgarStocks
23 Apr 15 04:56:14
$OSLH Percent Change Updated Thursday, April 23, 2015 07:07:18 AM $OUTR $RAD $EEM $IBB http://t.co/WS9jVctKH0
IH News Desk
23 Apr 15 02:11:07
$OUTR Stock Message Board Updated Thursday, April 23, 2015 04:11:15 AM $IYT $NKE $RSP $F http://t.co/a2GMTcsEkc
PolgarStocks
23 Apr 15 01:53:04
$OUTR Stock Forum Updated Thursday, April 23, 2015 04:07:18 AM $CAMP $QCOM $DOW $XLB http://t.co/Ltds7K5J4B
Langan Stocks
23 Apr 15 01:50:27
$SPLK Financials Updated Thursday, April 23, 2015 04:03:21 AM $CYTX $GE $XLV $OUTR http://t.co/Txvn0MfbIp
Rosner Stocks
23 Apr 15 01:48:48
$KO Investor Opinions Updated Thursday, April 23, 2015 03:59:24 AM $FB $OUTR $SCTY $XLK http://t.co/aa1Rt0qfqW
PolgarStocks
23 Apr 15 00:52:19
$SLTD Last Price Updated Thursday, April 23, 2015 03:07:17 AM $GBGM $SPLK $RSP $OUTR http://t.co/fwBDdHHR1u
Rosner Stocks
23 Apr 15 00:48:09
$SIL News Updated Thursday, April 23, 2015 02:59:22 AM $DUST $ENZN $EEM $OUTR http://t.co/hP5DI39LgH
IH News Desk
22 Apr 15 23:09:13
$GLD News Updated Thursday, April 23, 2015 01:11:14 AM $CYTX $OUTR $PSEC $XOM http://t.co/5eYmFPDcKr
iHangout
22 Apr 15 23:05:06
chartguy89: 2015 Trending Stocks: OUTR +0.71% Stock Charts $OUTR Outerwall Inc. http://t.co/k3RdfjdZYu
Investors Hangout
22 Apr 15 23:04:38
chartguy89: OUTR +0.71% Stock Charts $OUTR Outerwall Inc. http://t.co/iTr4HdSynl
Investors Hangout
22 Apr 15 23:04:38
chartguy89: OUTR +0.71% Stock Charts $OUTR Outerwall Inc. http://t.co/ajSIkhDscS
chartguy89
22 Apr 15 22:52:37
OUTR +0.71% Stock Charts $OUTR Outerwall Inc. (NASDAQ) Last Updated: 04/23/2015 00:52:35 OUTR Stock Chart - 1 http://t.co/0qOEqfAUdk
Investors Hangout
22 Apr 15 22:49:23
Stock_Tracker: Outerwall Inc (OUTR) 69.37 $OUTR #SaveTheWorms! http://t.co/zz3kNPROSx
Investors Hangout
22 Apr 15 22:49:20
Stock_Tracker: Outerwall Inc (OUTR) 69.37 $OUTR #SaveTheWorms! http://t.co/04uVOEFo15
Langan Stocks
22 Apr 15 22:47:53
$SBUX Financials Updated Thursday, April 23, 2015 01:03:19 AM $OUTR $CMG $XRT $OSLH http://t.co/okqSXF3GRW
IH News Desk
22 Apr 15 22:08:39
$CCJ Filings Updated Wednesday, April 22, 2015 12:11:36 PM $TSLA $V $OUTR $ARIA http://t.co/qjbeXzs2Ny
Rosner Stocks
22 Apr 15 19:44:10
$TMF Filings Updated Wednesday, April 22, 2015 9:59:21 PM $OUTR $AAP $UNP $ABBV http://t.co/GJ35Ae57js
PolgarStocks
22 Apr 15 18:46:21
$XLU Short Sales Updated Wednesday, April 22, 2015 9:07:14 PM $OUTR $GE $QCOM $CLIR http://t.co/P2FE8z3ceF
Hill Capital Mgt
22 Apr 15 18:34:18
RT @RetroWallSt: $IMAX $INXN $JCOM $LEA $LOCK $MMYT $EWM $MKTO $MCK $MU $MPAA $NS $OUTR $PENN $PSX $PBPB $PCLN $SB $SCI $SKX $SLM $BID $SPL…
IH News Desk
22 Apr 15 18:07:14
$CRDS Opinions Updated Wednesday, April 22, 2015 8:11:11 PM $UPRO $OUTR $V $CVX http://t.co/gYtTaAxXT8
Small Cap Strategist
22 Apr 15 17:45:41
Most searched small-cap stocks, Wed Apr 22nd - $YDLE $MEIP $ECOM $TASR $OUTR $GBSN $GWPH $HYGS - More: http://t.co/1znvSOIJVT - #smallcap
Timothy Collins
22 Apr 15 17:09:21
$IMAX $INXN $JCOM $LEA $LOCK $MMYT $EWM $MKTO $MCK $MU $MPAA $NS $OUTR $PENN $PSX $PBPB $PCLN $SB $SCI $SKX $SLM $BID $SPLK $STT $SYK
PolgarStocks
22 Apr 15 15:43:41
$PCAR Reviews Updated Wednesday, April 22, 2015 6:07:03 PM $OUTR $XIV $EEM $SLV http://t.co/1665lfsVeI
Langan Stocks
22 Apr 15 15:41:41
$MDY Company Info Updated Wednesday, April 22, 2015 6:03:15 PM $FB $JNK $OUTR $GILD http://t.co/0Jo6JuHSdC
Langan Stocks
22 Apr 15 15:41:39
$GLD Filings Updated Wednesday, April 22, 2015 6:03:15 PM $OUTR $UA $TIP $UNG http://t.co/0adPLytYWM
				
				
  +Follow July 30, 2013 8:56AM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.