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Outerwall Inc (OUTR), Verizon Communications Inc. (VZ): Get Ready for Rubi

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The Motley Fool is on the road in Seattle! Recently, we visited Coinstar — now officially renamed Outerwall Inc (NASDAQ:OUTR) — to speak with CFO-turned-CEO Scott Di Valerio about the 22-year-old company’s well-known coin-cashing machines, as well as its more recent acquisition of Redbox, and future initiatives to expand into other aspects of the automated retail market.

Coinstar has been refining its entry into the coffee business for several years. In this video segment, Scott says that the company anticipates big success once its Rubi kiosks are fully deployed and meeting the same high standards as the Coinstar and Redbox machines. The full version of the interview can be watched here.

A full transcript follows the video.

Eric Bleeker: Let’s talk about one of the big bets you’re making this year. Correct me if I’m wrong here, but when I read the analyst calls it looks like you’re actually going to roll out a lot more Rubi machines this year than net Redbox machines and Coinstar machines.

Verizon Communications Inc. (NYSE:VZ)

Obviously a big bet here; you guys are very confident. It’s interesting, the Verizon Communications Inc. (NYSE:VZ) partnership, it’s in many ways them using your brand, and you guys have their expertise for getting content. With Rubi, it’s you guys using Seattle’s Best as the brand portion, and using your expertise with the automated retailing.

What was the thought process that, “This is the vertical we want to attack, and this is how we’re getting started more in food and beverage?”

Scott Di Valerio: We’ve been looking at this coffee business and working at it for a few years. One of the things that has been true since we started is the cups of coffee per day that are needed have always been very good.

A lot of times when you start businesses you have to teach customers, or have them discover and then use the machine, and go through. Sometimes it takes some time to build up that demand and that returning demand.

With the coffee business when we put the machines out, from day one they’ve been very successful. A great cup of coffee at $1.00 or $1.50 for 12 or 16 ounces, or it’s $1.50 or $2.00 for a latte type drink, and espresso type drink; that’s a great value and a great taste. What happened is, people really like being able to do that and having that kind of value.

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