Verizon and Redbox launching challenger to Netflix


Verizon and Coinstar, the parent company of Redbox, surprised everyone Monday (2/6) with announcement of a joint venture to deliver video entertainment to consumers. The as-yet-unnamed service to compete with Netflix is expected to launch in the second half of this year.

“The venture’s services will offer all of the convenience, simplicity and value of Redbox new release DVD and Blu-ray Disc rentals combined with a new content-rich video on-demand streaming and download service from Verizon,” the partners declared. It will be subscription-based. Verizon will own 65% of the new venture, with Coinstar owning 35%.

“When you consider the core elements the parties bring to this venture – our powerful brands; our national rental kiosk footprint; our anytime, anywhere network presence; and our mutual commitment to customer-focused innovation – it’s clear that Verizon and Redbox are a powerful entertainment team,” said Bob Mudge, president of Verizon consumer and mass business markets.

“Consumers rely on Redbox for the latest new release movies at a great value, and our joint venture with Verizon will enable us to bring them even more value by offering expanded content offerings and greater flexibility for how and when they enjoy entertainment,” said Paul Davis, chief executive officer of Coinstar, Inc.  “This alliance is the result of a deliberate and strategic process to identify a partner who shares our commitment to delivering innovative solutions to consumers.  We look forward to rolling out the shared benefits this venture will bring to consumers, retailers, and shareholders.”

The partners said the venture between Verizon and Redbox will “create the kind of national multi-platform product that customers are demanding from video entertainment service providers.”  It will leverage Verizon’s industry-wide relationships with entertainment content providers, its advanced cloud computing technologies and state-of-the-art IP network infrastructure to distribute video on-demand content to its customers. 

“The joint venture will combine the accessibility and value of Redbox with Verizon’s vision for a borderless lifestyle – where consumers easily accomplish what they want or need to do, on their terms, through the power of the network,” said Mudge.  “Together, we are erasing old technology boundaries, freeing people to spontaneously enjoy the entertainment they want, whenever they choose, using the devices and media they prefer, at home or away.”

By offering instantly available online and mobile content with immediate access to physical media through rental kiosks, Verizon and Redbox said they will be uniquely positioned to deliver the best of both worlds – digital and physical – to consumers across the country.

RBR-TVBR observation: This is good news for TV networks and other video content owners – yet another company bidding for access to their programming, including library product. How big of a threat is this to Netflix? Well, Verizon has very deep pockets – plus it has the ability to promote the new service on FiOS and in its phone bill mailings.