Redbox And Verizon Pulling The Plug On Their Joint Video Streaming Service

Chuck Bednar for redOrbit.com – Your Universe Online
Redbox Instant, a streaming video service launched in March 2013 and jointly operated by the DVD rental kiosk firm’s parent company Outerwall Inc. and Verizon Communications will be permanently shut down on Tuesday, the two companies announced in a statement Saturday.
According to the announcement, Redbox Instant will cease operations at 11:59 p.m. Pacific time on October 7, and that information on applicable refunds would be emailed to customers and posted online on October 10. Users of the service will be able to continue to stream movies and use their Redbox kiosk credits until that time.
Redbox and Verizon initially launched the service in order to compete against online streaming video companies such as Netflix, Amazon Prime Video and Hulu Plus, but according to Reuters, it simply never caught on with the public. It marked Verizon’s first foray into the streaming video market outside of its own network operating region.
Subscribers to Redbox Instant paid $6 to $8 per month for access to a rotating library of about 4,500 movies, with the more expensive plan also providing them with coupons which could be redeemed for DVD rentals at Redbox kiosks all over the country, explained Adam Westlake of Slashgear. Unlike many of its rivals, however, it did not include TV shows.
“This is certainly the nail in the coffin for Redbox Instant, but the end comes as no surprise to many, as the service has had new customer sign-ups disabled for the last three months,” Westlake said. “This is was because of an ongoing issue with credit card fraud, but it also resulted in existing customers with expiring cards being unable to update payment information and continue their subscription.”
Redbox rental kiosks are expected to continue operating normally, he added.
In an FAQ posted to their website, Redbox said that no action will be required to receive a refund for services paid for but not received, and the amount due would be automatically paid to the credit or debit card affiliated with the user’s account. Subscribers should monitor their statements for a credit marked either “REDBOXINSTNT*MONTHLY” or “REDBOXINSTNT*RENTBUY” which should appear no later than Friday, October 24.
Redbox Instant was initially announced by Verizon in February 2012, with the initial plan calling for a release as early as that summer. It would be unveiled to the public a few months later, with alpha testing getting underway in July of that year. The service officially launched on March 14, 2013 and is now set to cease operations less than 20 months later.
Outerwall Chief Executive Officer J. Scott Di Valerio told investors on July 31 that subscriber numbers had been disappointing, and the company would “have some decisions to make in March,” when the service would have celebrated its second anniversary, according to Jim Polson of Bloomberg News.
“I’m sure a handful of dedicated fans will be crushed by this news,” said Michael Crider of the website Android Police. While he noted that “RedBox’s physical kiosk service seems to be doing alright for the admittedly underserved markets that it targets,” Crider added that he would be “very surprised if the company doesn’t try to tackle digital distribution again at some point in the future, either on its own or with another partner.”
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