Image 1 - Redbox And Verizon Join Forces To Challenge Netflix
February 6, 2012

Redbox And Verizon Join Forces To Challenge Netflix

Global telecommunications giant Verizon has announced that it will be teaming up with Coinstar Inc. – owner of Redbox, the popular unmanned DVD rental kiosks – to bring customers a new video service that combines digital and physical viewing options much like Netflix.

The difference between this new joint venture and Netflix, however, is that while customers would also have the option to stream films online, they could also pick-up and drop-off their physical rentals at Redbox kiosks rather than sending and receiving them via mail as Netflix users currently do.

The announcement came in a conference call Monday morning as markets were opening in the U.S. While both companies are keeping the precise details of the deal under wraps for the moment, Redbox and Verizon say they´ll be disclosing more information on the venture soon.

According to a press release (, the new service, which could become available as early as mid-summer, will bring together “the convenience, simplicity and value” of Redbox´s physical kiosk rentals with Verizon´s massive network capacity for streaming and downloading digital content.

In the conference call, Verizon´s president of consumer and mass business markets Bob Mudge exuded confidence about the new partnership.

“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.”

Coinstar´s CEO Paul Davis was similarly optimistic, saying that: “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.”

“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,” Davis added.

With a market that seems to be demanding ever greater value and flexibility from its entertainment media, many industry insiders expect that this kind of multi-platform service will hit a sweet spot with a consumer base increasingly made up of fastidious mediaphiles.

According to Mudge, that´s exactly what the forward-thinking partnership was aimed at.

“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 [“¦] 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.”

The tech news and analysis website TechCrunch reported late last year that a collaboration was brewing between Redbox and Verizon that would challenge Netflix.

It´s not yet entirely clear what hardware will be compatible with the new services, however, the press release on Monday stated that users would be able to stream content “using the media and devices they prefer,” leading most to speculate that an array of devices and platforms–including smartphones, Google TV and Xbox–will be able to use the service.

The partnership created is a limited liability company in which Verizon holds a 65 percent majority stake while Redbox holds the remaining 35 percent share. For the moment, both companies have declined to release additional details on the technicalities of the arrangement.


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