Redbox To Expand Beyond The Grocery Store Buggy Corral

A week ago I tweeted this:

“WB: Let Redbox suck the marrow from the DVD market bones, move on with your day. You’ve got 100yrs of profits to figure out. They’ve got 10.”

That may not be the case anymore though, if the streaming service Redbox and Verizon are cooking up ends up being one people actually use…

My tweet was prompted by the news that WB was seeing to extend the “back off our disc sales” buffer with 3rd-party rental vendors to 56 days. While the bloated, studio-ensnared Netflix is happy to roll over on any deal the big guys want to serve up, that’s a move that stabs at Redbox (and Blockbuster, but who gives a shit?) and their position on the front lines of DVD rental/sales. Immediacy is what drives Redbox, as the spry service has filled the gap of providing for the “I want it now / fuck a streaming service” customers that are still inclined to actually put round things into slots for their entertainment. Keeping new releases from the big red machine next to the buggy rack for such an extended period is a nasty move from a studio desperate to cling to a dwindling revenue stream.

Of course, my ultimate point was that Redbox is the result of a company — Coinstar — with a unique infrastructure and distribution platform making their move to suck out the last gasps of profit from a market destined only to disappear into the digital night*. But that appears to no longer be the case, as the cash-flush company is not content to simply suck juices from a dying corpse and are partnering with media giant Verizon to develop a streaming service by the end of the year (press release below).

The details are vague, but this nearly a half-a-billion dollar endeavor that will see the pair joining forces to deliver content across digital channels. Naturally this puts Redbox in direct competition with Netflix’s Instant Watch, Amazon’s Prime (the streaming component of which may be its own service soon), and of course Google, Apple, and many others. What’s interesting is that Verizon may well be able to foster licensing deals that Redbox, which has a contentious relationship with the studios, could not. When your gameplan to counter WB’s moves is to bulk purchase DVD titles (that WB doesn’t want you to have) and then flood the market with used copies once the rental bell curve has flattened out… well, WB might not be exactly vibrating with excitement to sign a favorable catalog licensing deal for your new upstart streaming platform.

Interesting times! I’m skeptical Redbox’s brand is going to shatter the streaming market when every major media conglomerate has a streaming service with name value and much deeper interests overall, even if Verizon is a partner with a lot of built-in eyeballs. That said, Redbox has cash and clearly has a vision to stay in the game longer than hocking impulse DVD rentals to grocery shoppers will support, and for the moment they are the lean, adaptable company in this game. The other services out there underestimate the big red machine at their own peril.

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*Don’t mistake my acknowledgement of the inevitable as excitement… it’s going to be a long day and a serious infrastructural broadband shift before I trade a Blu-ray experience (much less a theatrical experience) for a streaming one.

Source | Deadline

NEW YORK – Verizon and Coinstar, Inc. today announced the formation of a joint venture that will create a new choice for quality- and value-conscious  consumers seeking a simple and affordable way to access the video entertainment they crave. 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 joint venture plans to introduce the product portfolio in the second half of 2012. It will offer subscription services and more in an easy-to-use, flexible and affordable service that will allow all consumers across the U.S. to enjoy the new and popular entertainment they want, whenever they choose, using the media and devices they prefer. Additional brand and product information will be revealed in the coming months.

“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.”

This 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 will be uniquely positioned to deliver the best of both worlds – digital and physical – to consumers across the country.

The joint venture is a limited liability company with Verizon holding a 65 percent ownership share and Redbox holding a 35 percent ownership share at the outset.