Verizon, Redbox Ready Netflix Alternative, A Movie Rental And Online Streaming Service

02/06/2012 10:57 am ET

Could Redbox be ready to leak a Redstream?

Redbox and Verizon have outed a press release touting a new "joint venture" that will apparently combine Redbox's physical DVD rentals with an Internet-based streaming-and-download service. Specifics are scant at this point, but the new service seems primed to compete more directly with the once-thriving-now-struggling Netflix: like Netflix, the Redbox-Verizon service will apparently be subscription-based, meaning customers will pay a flat fee for access for to both physical DVDs from Redbox machines and an online trove of content available for both "on-demand streaming and download."

Again, Verizon and Redbox didn't let out too many firm details about their service; in lieu of actual details, here a few quotes from the Verizon/Redbox statement which at least give a few clues as to what this mysterious, as-yet-unnamed venture may look like:

The venture's services will offer all of the convenience, simplicity and value of Redbox new release DVD and Blu-ray Disc rentals combined with a new content-rich video on-demand streaming and download service from Verizon.

It will offer 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.

"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," said Mudge. "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."

What is clear is that the new service will combine, under a single brand and payment plan, DVD rentals from Redbox kiosks with both streaming and downloadable programming. What is not clear are price and the scope or selection of the media being offered online, the two factors that will likely make or break the service.

Among the questions to be answered: Will the Verizon/Redbox service be largely comprised of unlimited streaming of movies and television shows, like Netflix, or pay-per-view, On-Demand content? And if the service does offer unlimited streaming, how satisfying will its offerings be? Though complaints about Netflix's streaming library are widespread, it still has, by far, the largest content vault available of the services that give customers unlimited access to streaming media. In September Dish Network estimated that Netflix had 31,000 titles in its streaming library, more than doubling titles available on Amazon Prime, Blockbuster and Hulu Plus.

It also remains to be seen how much content Redbox and Verizon will be able to wrangle out of the large movie studios, which have become notoriously reluctant to make their movies and television shows available online to services like Netflix. Redbox's recent scuffle with Warner Bros. over a proposed 56-day waiting period for DVD releases is not likely to bolster studio relation.

Though Redbox has long been considered one of Netflix's key competitors, the two companies' models have generally looked quite different. Netflix customers pay a flat fee for an unlimited amount of movies and television shows, which they receive by mail or by streaming over the Internet; Redbox, meanwhile, has unleashed an army of DVD vending machines on the supermarkets and big box stores of America, offering rentals on a pay-per-night basis.

With its partnership with Verizon to bring content to the web, however, Redbox is entering Netflix's territory; the company's CEO Reed Hastings has reiterated many times that he believes streaming media, not the physical DVD, is the future of his company. Redbox and Verizon join Amazon, Hulu, Dish Network/Blockbuster, and the movie studios' Ultraviolet as upstart competitors looking to unseat Netflix in the streaming space.

The Redbox-Verizon attempt, which will launch in the second half of 2012, is set to once again face-off with Netflix in its own arena, another challenger for the incumbent leader as Netflix attempts to rebuild and reinvent itself following its forgettable, mistake-filled 2011.

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