Verizon & Redbox to start streaming video service. - High-Def Digest Forums
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Old 02-06-2012, 09:57 PM
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Default Verizon & Redbox to start streaming video service.

Just found this at USA Today.
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Old 02-07-2012, 02:20 AM
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February 6, 2012, 12:54 PM

Verizon Teaming With Redbox for DVD and Streaming Service


Verizon and Redbox have teamed up on a service intended to rival Netflix in allowing consumers to rent physical DVDs and stream movies via the Internet, the companies said Monday.

Any broadband customer, even if are outside the Verizon FiOS network, will have access to the new service, said Paul Davis, chief executive of Coinstar Inc., the company that operates the Redbox self-service DVD rental locations.

Redbox has 35,400 kiosks at convenience stores, in some McDonald’s and grocery and drugstores nationwide. Verizon has more than 100 million wireless customers and nine million broadband subscribers.

“It’s the best of both the physical and the digital,” Mr. Davis said in an interview.

In the last few years, cable and satellite companies have increasingly tried to deliver video via the Web. Verizon said Redbox brings brand recognition in the competitive home video arena and the ability for the joint company to offer physical DVDs, which, at least for now, many consumers still prefer to streaming.

Currently, Redbox does not offer a streaming service and does not control the digital rights to its movies. The Verizon partnership is expected to change that. Verizon estimates that by 2015 nearly half of the 114.7 million United States homes with televisions will have Internet-enabled sets. Those televisions already typically come with icons for Netflix, YouTube and Hulu.

The hope, said Bob Mudge, president of Verizon consumer and mass business markets, is that soon they will include a Redbox icon. Roughly 30 million people rent DVDs and video games for as little as $1 each at Redbox kiosks, compared with 24.4 million Netflix subscribers.

“We’ll target existing customers, but we’ll also be agnostic as to where you get your broadband,” Mr. Mudge said. Even if you don’t have Verizon, “you’ll get Redbox branded content.”

Also on Monday, Redbox said it would pay up to $100 million for assets of the NCR Corporation’s entertainment-related businesses, which include Blockbuster Express kiosk locations and DVD inventory. Fourth-quarter earnings reported by Coinstar on Monday showed that the company’s revenue jumped 33 percent largely because of Redbox.

Unlike Netflix, which offers television and movies and is experimenting with original content, Redbox primarily focuses on recently movies on DVD and Blu-ray and video games. Having a partner like Verizon could give the company the financial backing and scale to negotiate with Hollywood studios, with which Web-streaming companies have had a tense relationship, and acquire more programming.

Verizon will hold a 65 percent ownership share in the joint venture, and Coinstar 35 percent. Subscription services, which analysts expected to be priced at nearly half of what Netflix charges for DVD-by-mail and streaming services, will be introduced in the second half of 2012. Verizon and Coinstar declined to comment on pricing.

Netflix already has powerful streaming competitors in Amazon Prime, Hulu Plus and Wal-Mart’s Vudu service, though none of them offer DVD rentals.
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Old 02-07-2012, 01:34 PM
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Verizon is already doing video streaming on the 360...
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Old 02-08-2012, 01:44 AM
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Analysts Upbeat on Redbox Results
7 Feb, 2012
By: Chris Tribbey

A day after Redbox parent Coinstar made waves by announcing a streaming video partnership with Verizon and the acquisition of NCR Corp.’s DVD kiosk business, analysts were mostly upbeat on the moves.

“When it rains it pours. Lots of positives on the agenda at Coinstar,” was the headline of a research note from John Kraft, analyst with D.A. Davidson in Lake Oswego, Ore. He wrote that analysts now will be speculating “about how accretive the [NCR] acquisition and the new joint venture with Verizon will be.”

“At the end of the day, the company’s competitive positioning has improved,” Kraft wrote. “The DVD format remains the lowest price rental option and the new digital partnership should help retain attrition previously expected to shift to streaming.”

Kraft suggested the Verizon joint venture was a way to help offset consumers’ move away from DVD to streaming.

Michael Pachter, research analyst with Wedbush Securities, wrote that the $100 million NCR acquisition was a “clear positive” but the Verizon joint venture — which won’t launch until the second half of 2012 — is still an unknown.

“[The] Verizon [joint venture] will likely compete with Netflix’s hybrid offering, although there is no indication that the [joint venture] will offer unlimited viewing,” Pachter wrote. “We estimate that over 11 million of Netflix’s hybrid subscribers quit the service or switched to a streaming only or DVD-only plan over [the second quarter of 2011], creating a huge market opportunity either for Redbox on a standalone basis, or for a suitable hybrid.”

But BTIG Research analyst Richard Greenfield wrote in a research note that he was skeptical as to why Verizon is teaming with Redbox, with “DVDs going the way of VHS.”

“Given the initial capital commitment of $450 million … we presume this will look like a far weaker version of Amazon’s current Prime Instant Streaming service and be dramatically weaker than Netflix’s streaming service,” Greenfield wrote.

He went on to point out that Verizon is likely unwilling to commit the capital needed — more than $1.5 billion — to have a Netflix-like streaming offer all on its own.

“Long-term, we doubt Verizon really wants their streaming joint-venture to include DVD kiosk rentals, but it was a way to get started with a pre-existing user base (30 million plus active Redbox kiosks users),” he wrote.
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