Coinstar Banter

Scott,
I was just banging out some rough calculations on Coinstar and I'm
trying to figure out if there guidance makes sense. Tell me if this
makes sense to you:

Average Installed Kiosks for 2010: 30,000 (Per Coinstar
investor materials)
2010 DVD Revenue Guidance: $1.2M
Implied Rentals Per Day: 120 (@ $0.90….I
backed off the interchange from credit cards)
Average Machine Capacity 600

First Thought: Are these machines really renting
120 DVD's a day or 5 per hour per day?
Second Thought: If not, then they may be looking at a
price increase to make the target? What would this do to the value
proposition to the consumer.
Third Thought: How much will the 28 day target hurt
them? I think margins will improve, but revenue will suffer

The numbers don't feel like they add up to me. Perhaps the hole is blu-
ray and video games, I'm just not sure.

Simone,
One thing you have to remember with redbox is that everyday you keep
the DVD is technically a rental. So unless this is worded into the
analysis my guess would be they would consider me getting a DVD on
friday and not returning it for a week. 7 days rental.

Scott,
You are right about that, but either way the math implies that 20% of the machine's capacity is always out on rental. To your point, the better question is....Does 20% of the machine always being out on rental seem realistic? I like Redbox, but a fair amount of their movies do suck. I don't think I'll be renting 2012 Doomsday, which probably aired on the sci-fi channel last year, anytime saoon. 30,000 machines X 120 DVD's rented at any given time X 365 X $.95 post credit card rental fee = $1.3B.
Now, I believe their target is to have 30,000 machines by year end, which puts their average more around the 25K-27K average range for the year. Each 1,000 Kiosks would be about $40M of revenue a year using the same capacity assumption and rental rate.Sorry for the long drawn out email...but these are the thoughts occupying my mind as I stare at the ceiling when I'm feeding the baby.