By Richard McGill Murphy, contributor
FORTUNE -- Not unlike the old automats in New York City, the nifty machines that Coinstar (CSTR) operates satisfy consumer desires at the press of a button. Launched in 1991 by a Stanford grad student who had tired of accumulating coins in a jar on his dresser, Coinstar now generates about 85% of its revenue from the Redbox chain of DVD- and game-rental kiosks. That business has profited mightily from the swift decline of video rental stores. According to CEO Paul Davis, Coinstar will open between 8,000 and 9,000 new Redbox kiosks this year, or roughly one every hour. "Our rentals are priced below brick-and-mortar video stores, and you can return them anywhere," he says.
Fastest-Growing Rank: 15
HQ: Bellevue, Wash.
The business: Coinstar operates the Redbox chain of DVD- and videogame-rental kiosks, as well as machines for sorting change.
Risk/reward: As more people turn to downloading and streaming for their entertainment needs, Coinstar faces a threat to its core business of renting physical DVDs and games. Early this year investors cheered when the company announced Redbox Instant, a joint venture with Verizon (VZ) that will soon provide digital delivery and videodiscs for a single monthly subscription. "It's an attempt to capture some of the magic that Netflix (NFLX) lost last year by splitting its service," says Piper Jaffray analyst Mike Olson. CEO Paul Davis is also diversifying, inking a deal with Starbucks (SBUX) to operate Seattle's Best coffee kiosks in offices and other high-traffic locations. For at least the next few years, Coinstar will probably generate the bulk of its revenue from DVDs. And don't count out the humble kiosks. They outlasted once-mighty Blockbuster. They just might survive streaming.
This story is from the December 3, 2012 issue of Fortune.
Both Verizon's management and the unions are responding to immediate issues and changes, but they are both acting myopically. Both sides could have pursued a stronger strategy to get a piece of what they want.
By Richard Rumelt, contributor
FORTUNE -- There are very few surprised faces from either side of the Verizon picket lines. When a labor contract signed in buoyant times expires in a bleaker era – as is the MOREAug 16, 2011 10:39 AM ET
Today we all become digital. Thanks to Congress, which passed a law mandating this transition a few years ago, all analog life in these United States will cease and everything will be transformed from waves and particles into bits and bytes. Anybody who doesn't have a converter to make him or herself into a digital entity will simply disappear off the face of the earth.
We've had plenty of warning time MOREBing - Jun 12, 2009 9:16 AM ET
The Founding Fathers -- if one may use that somewhat sexist phrase in this enlightened, post-Enlightenment age -- crafted ten amendments to the Constitution that together form our treasured Bill of Rights. It is clear, however, that the Founders never saw the need for a new perceived entitlement that is now firmly entrenched in the hearts and minds of our citizenry. This, then, is the new Right... call it 10A: MOREBing - Nov 28, 2007 11:53 AM ET
|Stocks erase gains as Bernanke rally fades|
|'Grandparent scams' steal thousands from seniors|
|Bernanke warns against hitting the brakes too soon|
|Insanely durable smartphone ... from Caterpillar?|
|Memorial Day travel to dip this year|