A “weak slate of movies” at Redbox and high...

A “weak slate of movies” at Redbox and high World Cup viewership “stunted the typical seasonal lift we get in June when summer vacation begins” and contributed to lower-than-expected Q2 rentals, Outerwall CEO Scott Di Valerio said on a quarterly earnings call Thursday. As a result, Redbox revenue fell 6.9 percent from Q2 a year earlier to $445.5 million, based on lower rental activity, the company said. But Blu-ray “continued to perform well and grew as a percent of Redbox revenue and rentals,” Di Valerio said. Neither Outerwall nor Verizon is pleased with the rate of subscriber growth at the Redbox Instant by Verizon streaming service that launched two years ago, Di Valerio said in Q&A, though neither partner has disclosed subscriber figures publicly. The good news from Outerwall’s standpoint is that “transactional” VoD viewing at Redbox Instant platform is increasing, he said. The bad news is that Outerwall has poured $63 million into the service since 2012 and is obligated contractually to invest millions more, he said: “We're continuing to work with Verizon around our Redbox Instant to see if there’s proper ways from a funding perspective to increase subscribers and continue to grow out the business.” But “if we don’t hit certain subscriber thresholds, then we have some decisions to make in March,” he said. That was a reference to a statement in Outerwall’s 10-Q SEC filing Thursday (http://bit.ly/1ljNqEc) in which it said Redbox “has certain rights to cause Verizon to acquire Redbox’s interest” in Redbox Instant “at fair value.” The filing said “the earliest point we could provide our notice of intent to withdraw is expected to be in March.” Verizon representatives didn’t immediately comment.