Verizon – Redbox Video Service Potential Features

February 6, 2012

Today, Verizon and Redbox (Coinstar) announced a new joint venture to be a potential one stop shop for video needs of consumers. The service will include Redbox’s current Kiosks which rent DVDs, Blu-rays and video games as well as a streaming video catalog from Verizon. The to-be-named service (I like Red Verizon) is supposed to launch in the second half of this year, 2012. Let’s look at the release more carefully:

 ”Verizon and Coinstar, Inc. today announced the formation of a joint venture that will create a new choice for quality- and value-conscious consumers seeking a simple and affordable way to access the video entertainment they crave.  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.  Additional brand and product information will be revealed in the coming months.

Are “Value-conscious” and “affordable” another way of saying it will be price competitive with Netflix or simply more affordable than regular cable?

“Subscription services” would indicate an all-you-can-watch option similar to Netflix or Amazon Prime Instant Video. What could the “and more” be? For Amazon, it’s the combination of a streaming catalog, the ability to buy any new release on physical media, buy it on-line or rent it on-line. Will Verizon – Redbox offer the same one-stop shopping? “Flexible”  and “devices they prefer” would indicate that consumers will be able to watch on wide variety of smart phones, tablets, video game consoles and connected devices for the living room.

“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,” said Paul Davis, chief executive officer of Coinstar, Inc.

In another words, Verizon brings the network infrastructure for video streaming that RedBox doesn’t have. Verizon has been working for some time on creating a “virtual” version of their FIOS service. In another words, you could subscribe to FIOS programming via any Internet connection. In particular, Verizon already has a virtual version of FIOS service on a significant number of connected devices in their labs. At the end of this Verizon video about the future of the set top box, they show the Xbox, Playstation3 and Samsung Blu-players as examples of devices that can replace a Verizon cable box. Verizon also demonstrated the virtual FIOS service working on the Roku. My fellow blogger Dave Zatz has stated that in early 2011 that Verizon had their service already working on three dozen different connected devices. Also, Verizon has already deployed its FlexView app to existing customers on iOS and a significant number of Android devices. In another words, Verizon has already done a lot of the work required to launch a successful streaming service in the areas of infrastructure and device support. However, there’s probably significant work needed to create a seamless user experience to provide one integrated view of all of the different potential offerings (kiosk, streaming, pay-per-view, etc…).

Redbox, on the other hand, brings the latest releases to the consumer through its kiosks. While one can rent the latest releases through FIOS pay-per-view, the prices are not competitive. It costs $6 to rent a new release in HD and $5 in SD. The same movies are on iTunes or Amazon for $3.99 in HD. Currently, it only costs a $1 to rent a DVD on Redbox ($1.50 for Blu-ray), but there is a small price increase coming.

This venture between Verizon and Redbox will create the kind of national multi-platform product that customers are demanding from video entertainment service providers.  It will leverage Verizon’s industry-wide relationships with entertainment content providers, its advanced cloud computing technologies and state-of-the-art IP network infrastructure to distribute video on-demand content to its customers.

Given the new relationship with Redbox, will Verizon still have the same relationship with entertainment content providers? In particular, Redbox just announced that it will not respect Warner Brothers’ new 56-day window for holding back new releases. Netflix agreed to the extended window for their DVD-by-mail service. The extension of the window is viewed as a move to drive the sales of DVDs and Blu-rays. Furthermore, the Verizon FlexView catalog of TV titles is fairly limited in size. This will be an area to potentially beef up ( as well as the need for more HD titles). I wonder if Verizon owns any streaming rights to its current set of FlexView content?

“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.”

“The erasing of old technology boundaries”? On the surface that’s probably a reference to the virtual version of the FIOS service. The cable company simply becomes an IP provider and you buy your programming from the cloud. Will this service also include live TV? Could it be that’s what Verizon and Redbox are going to offer that as their differentiator? My sources indicate that the service will have a rich set of offerings compared to other choices in the market. If the price is right, this could be a cord-cutters dream come true.

Update: Tim Carmody from Wired has some more tidbits on the new service. It appears that you will be able to buy different offerings or components from the service.

You can read the complete Verizon Coinstar release here.


Verizon and Redbox - Coinstar Join Forces

Verizon and Redbox Join Forces

Source:  via Techmeme


Tags: Amazon, Android, FIOS, iOS, Netflix, Playstation3, Red Box, Roku, Verizon, Xbox

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