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Netflix Killer? Verizon, Redbox Joint Venture Commences Testing, Announces CEO

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The new kid on the video-business block is called Redbox Instant by Verizon.

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MINYANVILLE ORIGINAL There has been little news or fanfare since Verizon (VZ) and Coinstar (CSTR) subsidiary Redbox announced five months ago that it would be teaming up to launch a video-streaming service.

Today, however, the first details of the service began to trickle out. We now know the name of the service: Redbox Instant by Verizon as the joint venture's website has just gone live for alpha testing. Yes, it sounds more than a tad similar to its competitors, Amazon (AMZN) Instant and Netflix (NFLX) Instant. Its teaser slogan? "DVDs at the kiosk + instant streaming hits, all in one fist-pumping package."

The joint venture's newly-appointed CEO is Shawn Strickland, who previously served as vice president of Verizon's FiOS division. Media analysts have praised the appointment of Strickland, considered one of Verizon's top executives after his success with popularizing FiOS.

"[It] speaks to how serious Verizon is taking their entrance into the subscription video on demand ('SVOD'), over-the-top ('OTT') video business," said BTIG analyst Rich Greenfield in a research note, according to Deadline. Greenfield did, however, question if Strickland's experience would help in his new job, saying, "FIOS simply paid well-established rates for 'all' broadcast/cable network content, where at Redbox Instant, the task is to source the 'right' content at the 'right' price for a streaming audience."

According to Coinstar, the debut of the service is "anticipated later this year," notes Peter Kafka at All Things D. We know that Redbox Instant will be a subscription-based service that offers both physical and streaming content, but we don't know what the subscription rate will be, how the subscription will amalgamate physical and digital content offerings, and whether the focus of the offerings will be TV shows or movies.

Why offer a mix of DVD and streaming content, and not concentrate on one or the other? Coinstar CEO Paul Davis told Fast Company that "consumers made it clear that they like both the physical disc as well as the digital."

"Given the fact that we have approximately 30 million consumers, and that we are [located] where people go every day -- gas stations, convenient stores, supermarkets, drug stores -- the instant access to our discs is a real compelling benefit, versus Netflix, where you put what you want in the movie queue, and then you have to wait a few days and hope it comes. We remove that mystery. We really allow consumers to get what they want on new releases, and then for those who want older movies -- a more catalog offering -- they can get that as well through what we'll be offering as a part of the joint venture."

Based on the details we know, Peter Kafka theorizes that the Redbox Instant by Verizon "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."

He also highlighted the timing of this joint venture announcement. Coincidentally or not, Netflix is due to report earnings today.

Twitter: @sterlingwong
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