RedBox Partners With Verizon, Launches Streaming Service
Coinstar subsidiary Redbox today announced a new partnership with Verizon for the launch of a streaming video service. The joint venture will launch in second half of 2012, and be subscription-based and “affordable service …
Context & Ripple Effects
A December report had already flagged a major Verizon-Redbox tie-up; the companies have turned that planned partnership into a defined joint venture with a second-half 2012 target.
The move arrives as Redbox expands its physical-rental footprint through Blockbuster Express assets and exits Warner Bros.’ 56-day rental-delay contract, giving its streaming plan greater strategic weight as an extension of—not a clean break from—its kiosk business.
First-order effects
- Redbox gains a planned subscription-video outlet alongside kiosk rentals, while Verizon adds a video joint venture to its consumer offering.
- Both companies are committed to building and launching an affordable subscription service in the second half of 2012, making execution and content availability their immediate shared task.
Second-order effects
- Redbox must manage the shift from its planned Verizon alliance without undermining kiosk rentals, creating a bundle-cannibalization tradeoff between subscription access and per-rental revenue.
- The Warner Bros. contract change gives Redbox more flexibility over title timing, strengthening the importance of its content terms as it prepares a service that spans physical and online viewing.
Third-order effects
- If carriers continue pairing distribution with established consumer-media brands, video services may be organized around partnerships that combine network reach with existing rental and customer channels rather than standalone streaming entrants.
The trend: Streaming video is becoming a hybrid distribution business, with telecom partners and physical-media operators combining complementary customer channels and delivery capabilities.