Redbox and Verizon Unite with Hopes of Crushing Netflix and Blockbuster

Redbox and Verizon Unite with Hopes of Crushing Netflix and Blockbuster

Feb 07, 2012

Redbox rental kioskWith Netflix’s recent stumbles in the court of public opinion (we’re still trying to figure out who thought Qwikster was a good idea…), it was only a matter of time before competitors moved in to try and carve themselves a piece of the lucrative DVD rental and streaming pie. Analysts suspected the biggest threat to Netflix’s continued dominance would be Blockbuster – the former king of video was acquired by Dish Network and prepared to launch their own streaming service – but not so fast. Redbox has just entered the fray in a very big way.

Two major pieces of news broke yesterday – signaling that Redbox not only has their sites set on going head to head with Netflix, but that they could also try to drive another dagger into Blockbuster’s heart as well.

The big news was a reveal that Redbox will team up with Verizon to create a brand new streaming video service that aims to rival Netflix. Set to launch later this year, the companies say this new venture will provide “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.”

No word yet on what the pricing might be, or how Verizon and Redbox plan to deal with Hollywood – who wants higher licensing fees to stream their product – but this is still a huge announcement. Streaming movies is certainly the future (and arguably the present) and this move allows Redbox to jump from the soon-to-be-antiquated realm of physical media rentals to the more modern online distribution model. The big question is will they beef up their selection?

Even though the company has found an entry point into the digital universe, Redbox isn’t set to give up on the kiosk business just yet. They’ve also agreed to buy NCR – the people responsible for making Blockbuster’s rental kiosks – for $100 million. For that price, they not only get NCR’s “hardware, software, and service,” but the opportunity to push aside a chief rival. Blockbuster doesn’t own their kiosks – and instead have been licensing their name to NCR. That seems likely to change in the very near future now that Redbox is in charge. There aren’t any details on how soon Redbox could boot Blockbuster from the deal, but it seems likely that they will as soon as is contractually possible.

While there are more questions than answers surrounding these events at the moment, what we do know is this: Redbox is poised to make a serious play to become the biggest force in how we see movies. With the backing of Verizon (who will control 65% of the joint venture), money isn’t a huge hurdle to overcome. While we’re not the biggest Redbox fans in the world (the selection at the kiosks is disappointing to anyone who loves films that aren’t mainstream), we’re interested in hearing more about the pricing and plans that the companies have in store. If they manage to get licenses to more or better titles than Netflix and Blockbuster, it’s safe to assume that people will switch.

This is potentially good news for consumers – who will theoretically have three options for their streaming movie service. With competition, we can expect to see each service going the extra mile to obtain the best licenses for their respective platform, which means more quality films to watch through the multitude of devices we all carry everywhere. Not only that, but with a competitive market place, we may even see better deals on subscription rates – and who doesn’t love saving money?

Whatever happens, this is interesting news that could potentially alter the landscape when it comes to how and where we get our movies. We’ll be keeping an eye on Redbox and Verizon’s progress as they get closer to launching their service, while waiting to see what Netflix and Blockbuster plan as far as reactions. 

[via FilmSchoolRejects]

Categories: News, At Home, Disc-y Business
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