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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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik