For Coinstar CEO, no time to ease into new job


New Coi

Image representing Coinstar as depicted in Cru...
nstar Chief Executive Scott Di Valerio takes over the Bellevue-based company amid tough questions on Wall Street: Is Coinstar's all-important Redbox movie DVD business past its prime? And can its new Rubi coffee-vending machines succeed where others have failed?
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New Coinstar Chief Executive Scott Di Valerio takes over the Bellevue-based company amid tough questions on Wall Street: Is Coinstar's all-important Redbox movie DVD business past its prime? And can its new Rubi coffee-vending machines succeed where others have failed?

Di Valerio, who became CEO last Monday after three years as Coinstar's chief financial officer, gives two simple answers: "No" and "Yes."

"Our focus is to try to double the size of the company over the next five years," he said during a recent interview at Coinstar's headquarters near downtown Bellevue. "Innovation is important, and new ventures are going to help us get there."

Wall Street's worries are driven by a shift in consumer behavior from physical movie-disc rentals to digital streaming.

Redbox, which rents new-release DVDs for $1.20 a day at self-serve kiosks, generated a whopping 86 percent of Coinstar's $2.2 billion in revenue last year.

Scott Di Valerio

Title: New chief executive of Coinstar

Age: 50

Personal: Lives in Sammamish with wife, Shara, and their teen son, the youngest of three children.

Education: Graduated from the University of San Diego with a bachelor's in business administration and accounting.

Career: Became Coinstar CEO on April 1 after three years as chief financial officer. Previous employers include Lenovo and Microsoft.

2011 pay: $1.6 million, including bonuses, stock and options awards, and a 401(k) match

Community: Serves on the boards of Childhaven, a Seattle nonprofit that seeks to prevent child abuse and neglect, as well as the University of San Diego School of Business Administration.

Source: Seattle Times research

Scott Di Valerio

Title: New chief executive of Coinstar

Age: 50

Personal: Lives in Sammamish with wife, Shara, and their teen son, the youngest of three children.

Education: Graduated from the University of San Diego with a bachelor's in business administration and accounting.

Career: Became Coinstar CEO on April 1 after three years as chief financial officer. Previous employers include Lenovo and Microsoft.

2011 pay: $1.6 million, including bonuses, stock and options awards, and a 401(k) match

Community: Serves on the boards of Childhaven, a Seattle nonprofit that seeks to prevent child abuse and neglect, as well as the University of San Diego School of Business Administration.

Source: Seattle Times research


The Oakbrook Terrace, Ill.-based subsidiary grew 22 percent, boosted by strong demand for pricier Blu-ray discs and video games, as well as the addition of 8,300 new kiosks. But Redbox plans no more than 1,000 additional kiosks this year, stoking concerns about its growth prospects.

At the same time, Coinstar is spending up to $25 million annually on new ventures with little so far to show for it. The company reported only $2.5 million in revenue last year from new ventures, including machines that sell coffee, refurbished electronics and personalized photos.

"I'm not a big fan of some of their new ventures, and some of them make a lot of sense to me," said analyst Michael Pachter, of Wedbush Securities in Los Angeles.

While Pachter believes Coinstar's coffee dispensers show promise, he's less optimistic about its new photo-booth concept, which lets customers decorate and share photos via email or Facebook.

"I think the photo idea is a bad one. Seriously, you can take a photo with your iPhone and Photoshop it on your PC," Pachter said.

As for the CEO changeover at Coinstar, Pachter is unequivocal.

"I love Scott," he said of Di Valerio. "He's very bright. He understands what he's doing, and he has a focus."

Surprise shift

Coinstar surprised Wall Street in January when the company announced that Di Valerio, 50, would replace Paul Davis as CEO on April 1. Coinstar said only that Davis, 56, was retiring after four years in the post.

Davis said during a short interview last month that he felt it was time to move on.

"I'm going to continue to be involved in the community, and then I'll just look at other opportunities," said Davis, who's active with local nonprofit FareStart, which teaches culinary skills to homeless people.

Davis said Di Valerio will "do great" in his new role.

"Scott and I have worked side by side for three years. He's a highly capable, talented leader, as is the rest of the team," Davis said.

"I've done what I love to do," he said. "I love reconstructing businesses, and have set the stage for many, many years of growth."

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