LEADER

Amanda Brunssen, Justin Gonner, Staci Sullivan WHO??

OVERVIEW  Coinstar, Inc. is a provider of automated retail solutions, which offers convenient products and services.  The company‘s offerings include its Redbox business, where consumers can rent or purchase movies and video games from self-service kiosks and its Coin business, where consumers can convert their coin to cash or stored value products at self-service coin counting kiosks. Its New Ventures business is focused on identifying, evaluating, building, and developing self-service concepts in the marketplace.  The company has approximately 33,300 DVD kiosks and 18,900 coin- counting kiosks in supermarkets, drug stores, mass merchants, financial institutions, convenience stores, and restaurants.

CSTR CONT…  Market Cap billion  No expected splits in the near future  Do not pay a dividend.  Retain all future earnings to fund development and growth.  Retire debt obligations  Buy back common stock

WHAT’S GOING ON IN THE INDUSTRY  Netflix ended an exclusive deal with Epix  Amazon just made a 3 year deal with will contribute 3000 movies to its video streaming service  Netflix-$96/year subscription, Amazon-$79/year subscription  Epix may join forces with Apple and Google  Google users could access Epix streaming through Android  Apple users could access Epix streaming through iPhones and iPads, etc.

SWOT ANALYSIS  Strengths-Redboxes in nearly every city, 24 hours.  Convienece  High brand awareness through strategic placement in mass retailers  Inexpensive, appeals to a large target segment  Weaknesses-Majority of revenue comes from Redbox.  Does not use TV, print or other innovative marketing channels  Opportunities-Currently don’t pay dividends.  Other 4 th wall placements such as dollar stores  Diversify  Threats- Licensing agreements with movie studios being terminated before the contract length  Cashless society  Free ways of watching movies such as youtube or illegal websites

COMPETITORS  Netflix- Started in  Offers streaming and expanding in the international market  More than 7000 movies  Long wait for new releases  Poor customer service  Blockbuster- Been around since 1985  Can return any online order to local blockbuster stores  Need two separate accounts to rent online and in the store  Movies rented in the store cannot be returned by mail

CSTR COMPETITIVE ADVANTAGE  Redbox and Verizon are teaming up to offer an online streaming service to directly compete with Netflix  New customer and product segments, offering to new geographies with the online streaming  Verizon controls the pipeline for 14% of U.S. households through internet and telephone services  Only taking a majority stake in the new venture. Verizon controls 65% and CSTR initial investment is $14 million which is not much for a $2 billion company  Available to access 24 hours a day  Don’t have to sign up for a membership  If you forget to return the DVD the next day it is only another $1 for each day you have it

HISTORY  Jens Molbak, founder of Constar, was a graduate student at Stanford University when he came up with the idea.  Two years after he thought of the idea, two classmates joined him to make Coinstar successful.  They creating a machine that could quickly count change and filter out the foreign coins, screws, paper clips, and other debris that is often found in piggy banks and coin jars.

HISTORY CONTINUED…  1992 is when the machine was going to be tested in the real world and the first machine was installed in four supermarkets in San Francisco.  Consumers loved the coin machines and now today they are found in grocery stores, drug stores, and other locations across the United States where people shop or go by.  In 2001 Jen stepped down as chairman of the company but still remains within the company.

HISTORY CONTINUED…  In 2002 a division of McDonald’s developed the first Redbox.  Coinstar executives recognized the alignment with its automated retail strategy and they made an investment in  In 2009 they completed their acquisition and since then Redbox has grown to be one of the top movie rental companies.

MORE HISTORY  In 2010, Redbox made Blu-ray Discs available and then one year later video games became available.  in 2012, Redbox has over 2 billion total units rented.  The Redbox consumer base is continuing to grow and also there is mobile apps available that makes it easy for people to get movies and game on the go.  Coinstar continues to explore and test new automated retail solutions that will make consumers lives easier.

DO YOU KNOW YOUR COINSTAR?  How many Redbox’s are in Dubuque and where are they located?  How many Coinstars are in Dubuque and where are they located?

ANSWERS  Redbox: 12  Walgreens 20 th street (2)  Hy-Vee at Locus Street (2)  Walgreen's on JFK (4)  Hy-Vee dodge street (1)  Wal-Mart (1)  Hy-Vee at Asbury (2)  CoinStar: 1  Walmart (1)

CEO, PAUL DAVIS  Paul joined Coinstar in April 2008 as chief operating officer  In 2009 he became the chief executive officer  He serves on Coinstar’s Board of Directors.  Global business leader  Paul brings 30 years experience in retail and consumer packaged goods.  Past experience, various sales and executive management positions  Chief executive of Kettle Foods  President of Starbucks North America  President of PepsiCo’s Frito-Lay Company in Canada.  Also various positions with Procter and Gamble.

PRESIDENT AND CHIEF OPERATING OFFICER, GREGG KAPLAN  In 2009, Gregg joined Coinstar as president and chief operating officer  Past experience  Chief executive officer of Redbox Automated Retail, LLC, the leading DVD rental kiosk company, which is now a wholly-owned subsidiary of Coinstar.  McDonald’s Corporation working in strategy and business development group  he helped McDonald’s create and build new businesses.  Gregg’s other experience includes:  working as an investment banker at Furman Selz where he focused on corporate transactions of media and entertainment companies.

CHIEF FINANCIAL OFFICER, J. SCOTT DI VALERIO  January 2010, Scott joined Coinstar.  In March 2011 he became chief financial officer.  In addition to his leadership of the finance organization, Scott also leads the company’s corporate information technology and supply chain functions. He has over 25 years finance, operations and management experience.  Past Experience  President of the Americas for the Lenovo Group Limited (a leading computer manufacturer).  Senior positions at Microsoft Corp. as corporate vice president of Microsoft’s OEM division and as corporate vice president of finance and administration and chief accounting officer.  Management positions at The Walt Disney Company and Mindwave Software Inc.  Partner at PricewaterhouseCoopers.

FINANCIAL STATEMENT NFLX No

CSTR MARKET STATUS CSTR has the lowest PEG ratio in the Specialized Consumer Services Industry

INVESTOR QUESTIONS

“EASY, FAST, AND INCREDIBLY CONVENIENT.”  Great PEG (.57) ratio and EPS. Best in the industry  Top growth stock in the industry. LEADER  Small market cap with plenty of room to grow and other markets to expand.  How many have rented a DVD in the last 6 months?  Streaming issues? How many people actually stream?

HOLD!