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Shares in Outerwall (NASDAQ: OUTR ) , formally known as Coinstar, took a hit last week after the company reported disappointing revenue from its Redbox business. Sure, Outerwall managed to tighten its dominating grip on the DVD rental business. But even after expanding its lead there over Netflix (NASDAQ: NFLX ) , Redbox posted a big dip in comparable sales at its DVD kiosks.
In the video below, Fool contributor Demitrios Kalogeropoulos argues that DVDs may be dying faster than many people expected and that, for better or worse, Outerwall's business is closely tied to the fortunes of that shrinking industry.