Peter Kafka

Recent Posts by Peter Kafka

Verizon and Redbox Start Testing Their New Web Video Service: Here’s What to Expect

Back in February, Verizon and Redbox announced a joint-venture video service but said little else about it.

Now they’re back, and they’re saying a little bit more: The service has a name — Redbox Instant by Verizon — and a CEO — Verizon executive Shawn Strickland. Redbox owner Coinstar says the service is in “alpha” testing, and says a full launch is “anticipated later this year.”

And that’s it as far as official details go. What about the stuff we care about — pricing, titles, strategy? We’re supposed to keep waiting on that stuff. But in the meantime, I can offer some educated guesses:

  • Expect the new service to focus on movies instead of TV shows. That makes sense, because the existing Redbox service is basically a movie service. And it also makes sense because Netflix and Amazon are already spending lots of time and effort licensing TV shows for their subscription video services.
  • Don’t expect to be blown away by the subscription service’s digital movie selection: Hollywood studios weren’t excited about giving Netflix access to relatively recent films for its service, and I don’t think they’ll treat Redbox Instant any differently. Deals with the likes of Viacom’s Epix will give the service a handful of more recent movies — just like Netflix offers — but the bulk of the selection will almost certainly be catalog titles, which the JV will market as “movies that matter.”
  • But if you do want newish movies, you’ll have options: The service will offer customers a certain number of trips to Redbox kiosks, so you can get newish titles that way. And I believe it will also offer a la carte video-on-demand rentals, either at launch or later down the road. That is, anything you can rent from iTunes, Amazon, etc., should also be available through the JV.
  • Don’t expect to get a different deal if you’re already a Verizon Fios customer. Unlike video services recently launched by Dish/Blockbuster and Comcast, this one is explicitly being offered beyond the 13-state “footprint” Verizon has built out for its Fios pay-TV service. That is, you don’t have to be a Verizon phone or video customer to get the service. But it will be marketed as a complimentary option to Fios and, for the time being, Fios customers will end up paying the same price as non-Fios customers. My hunch: Something in the $10-a-month range.

The more I hear about it, the more I think this is going to be a Redbox subscription offer with a smallish, ancillary streaming service bolted on. Pretty much the way Netflix used to work when Reed Hastings started with streaming a few years ago.

That could morph into something bigger, later. But for now, I don’t think this one will keep Hastings up at night.

Speaking of which: Netflix reports quarterly earnings today. Think that has anything to do with the timing of this morning’s announcement? In any case, I’ll have live coverage after 4 pm ET. See you then.


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There’s a lot of attention and PR around Marissa, but their product lineup just kind of blows.

— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google