Posted on Monday, February 6th, 2012 by Russ Fischer
Redbox, the DVD rental kiosk company owned by Coinstar, has been steadily encroaching on the market share of Netflix and storefront DVD rental shops for the past few years. The company’s biggest promise, the details of which have so far remained a mystery, is the eventual launch of a streaming service that will compete directly with similar offerings from Netflix, Amazon, iTunes and other companies.
Today Rebox announced that it has partnered with Verizon to make this streaming service a reality. The venture, which is currently unnamed, will charge customers a monthly subscription fee for which they’ll be able to take DVDs from Redbox kiosks, and access streaming catalogue film titles, with that aspect of the business powered by Verizon’s existing digital infrastructure.
Back in December, TechCrunch reported the likely collaboration between Verizon and Redbox, which was going by the internal name Project Zoetrope. Reported details at the time were that the service might use a credit system, similar to the internal currencies used on Xbox Live; you’d buy a certain number of credits per month, which could then be applied to DVD kiosk rentals or streaming video. Those details are unconfirmed at this time.
Today’s press release suggests that this is more Verizon’s venture than Redbox’s, with the latter owning only 35% of the project, and Verizon 65%. Indeed, the streaming aspect will entirely be handled by Verizon, with the company working to secure digital content rights from studios. Given the often-contentious relationship Redbox has had with studios — going to far as to sidestep limitations on DVD rentals by purchasing discs without going throuh studios — one has to wonder how easy this will be to implement. Studios like revenue streams, but will they be quick to license content to a venture in which Redbox is participating?
The small details of this service — including pricing — are yet to be revealed, but the companies are calling this an “over the top” digital service, which suggests they have plans to eventually compete with pay cable and satellite services. There might also be live broadcast content eventually included in the subscription. That all seems pretty grandiose at the moment, but we know almost nothing of what this service will eventually offer.
Deadline theorizes that this announcement, which seems very incomplete, was pushed by the meeting that Coinstar CEO Paul Davis will have later today to discuss the company’s fourth-quarter earnings with analysts, and that details aren’t anywhere close to being ready for release.
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