Verizon To Set Up Redbox Streaming Service
Famed vending machine-style movie rental service Redbox are planning to make a move into the world of online streaming, set to be assisted by telecommunications company Verizon, as the two companies look to pair up in a bid to enter the market.
Ready to be launched in the second half of 2012, the deal will see online movies provided via a joint platform under Verizon’s website (most likely with Redbox branding), which will also be available in ‘mobile’ format.
Prices of the combination service will reportedly begin at $6 a month for Verzion-hosted streaming options alongside the ability to take-out one DVD rental at a time from Redbox.
This will be cheaper than the option provided by high-profile streamer Netflix, who’s cheapest offering is $7.99 for streaming or mail-based single DVD rental (combination deals starting at $15.98).
For Verzion, it will be their first move into video streaming aside from the FiOS TV offering that complements their TV networks. Head of FiOS Bob Mudge was keen to start on the new project, though, stating: “We’re in negotiations right now and finalizing. I feel very confident we’ll have a wide set of digital distribution content.”
The venture will be mainly Verizon’s, as industry experts estimate that they will contribute a total of $26m in start-up funds to the service, in addition to Coinstar-owned Redbox’s confirmed contribution of $14m (a total of $40m start-up cash). The Verizon start-up sums were generated by confirmation that the business will be owned 65-35 in the telecommunications company’s favour, while a five-strong board of directors will continue the theme by featuring a rounded-up ratio of 3:2 for Verizon.
Steve Clement, an analyst at Pacific Crest, was sceptical of the joint-venture’s potential, saying: “We don’t know what kind of content they’ll have available, what they’ll pay for that content and what they’ll charge for it. There’s way more questions than answers at this point.”
It is a unique combination of two fairly different companies, but will this Verizon-Redbox project make a strong initial impact in the American online streaming market?
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This sounds like a pretty cool deal, but one of my issues with Redbox was the lack of content they had. It was good for a movie here and there, but not as my only source of renting. Blockbuster was always my favorite place for renting, it just wasn’t as convenient anymore to be going in the store and looking around. Obviously this means when I heard about their Blockbuster @ Home service at work at DISH, I was excited. I have all of their content available to me, I get a ton of streaming right on my TV and discs by mail. No due dates or late fees is a huge bonus for me!