UPDATE, 3:23 PM: If you were waiting for detailed information about the Redbox Instant by Verizon streaming plans, you’ll have to keep waiting. Coinstar told analysts in a conference call that the online service is in an internal beta test and the test will be opened to the public soon. “We’ve been really pleased with the progress,” CEO Paul Davis says. But he didn’t offer much more, including what studios might participate in addition to Warner Bros. “We’ll talk more about what the other offerings will be when we go public.” Coinstar said it kicked $10.5M into the joint venture in Q3. If it has to add more in Q4 then it will be “relatively small.”

PREVIOUS, 1:16 PM: Even the announcement of a new distribution agreement with Warner Bros — which will provide Redbox kiosks with home video titles 28 days after they hit retail stores — wasn’t enough to help the Coinstar in investors’ eyes. The stock price started to dive in late trading, and continued to fall about 8% after hours when the company behind the Redbox kiosks reported disappointing Q3 results. Net income of $36.8M was down 9.5% vs the period last year, on revenues of $537.6M, up 15.5%. Analysts thought that revenues would come in closer to $557M. And earnings per share from continuing operations, at $1.14 was a penny shy of forecasts. CFO J. Scott DiValerio says that the collection of Q3 home video discs had “fewer titles and several weeks with little new content” while the Olympics “took a large number of movie viewers out of the home entertainment market. The compounding effect of these factors was greater than we expected.” As a result, Coinstar lowered its financial estimates for 2012. It now expects revenues of as much as $2.24B, -3% vs its projection three months ago, with earnings per share from continuing operations of as much as $4.65, down 5%.

The Warner Bros announcement appears designed to soften the blow. Early this year, Redbox began to buy Warner Bros titles in the open market — instead of directly from the studio — after it demanded a 56-day delay. The new two-year agreement “demonstrates our ongoing commitment to offer new release content to our consumers and underscores the importance of the physical DVD in the home entertainment ecosystem” CEO Paul Davis says. In addition, Redbox Instant By Verizon — the kiosk company’s upcoming streaming venture with the phone giant — will be able to rent and sell titles, and includes a subscription VOD component. Redbox and Verizon say they’ll launch the service by year-end but have not disclosed how it will work or how much it will cost.

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