Peter Kafka

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Verizon Teams With Redbox for a Netflix-Style Video Service

Here’s the Netflix-style video service that Verizon wouldn’t talk about a couple months ago: A joint venture with Redbox that promises “instantly available online and mobile content with immediate access to physical media through rental kiosks.”

The two companies put out a press release without a whole lot of detail (below) but are holding a press conference shortly where we may be able to tease some more out of them. (Update: Well, that was a waste of 10 minutes. Verizon is also promising to make executives available for interviews this morning, but my expectations are now very, very, very low. Subterranean.)

Right now, all they’re really saying is that they’ll have video content, delivered over the Web and via mobile devices, and that consumers will be able to stream some of it and download some of it.

Roping Redbox into the JV — Verizon will own 65 percent of the company, and the movie rental service will have the remainder — makes sense, because it will give the unnamed service a digital-plus-physical option. Just like Netflix and Dish Network’s Blockbuster already have.

But while the big media companies are very happy to license some of their content to Verizon or any other player that wants to pay for digital rights, they are much less comfortable with Coinstar’s Redbox, and have tangled with that service in court.

Right now, for instance, Redbox has announced that it won’t work with Warner Bros.’ new 56-day “window” for new movies on DVD, and will buy discs from third-party sources instead of getting them directly from the studio. So it will be interesting to see how Warner Bros. and parent company Time Warner treat the new venture, and whether that dynamic plays out with other content guys.

Joint Venture Will Offer the Best of Both Worlds – Physical and Digital – to All Consumers Nationwide

NEW YORK – 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.

The joint venture plans to introduce the product portfolio in the second half of 2012. 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.

“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,” said Bob Mudge, president of Verizon consumer and mass business markets.

“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. “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.”

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.

“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.”

By offering instantly available online and mobile content with immediate access to physical media through rental kiosks, Verizon and Redbox will be uniquely positioned to deliver the best of both worlds – digital and physical – to consumers across the country.
The joint venture is a limited liability company with Verizon holding a 65 percent ownership share and Redbox holding a 35 percent ownership share at the outset.

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