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Verizon/Redbox Streaming Service Just Got Bigger

On Monday Verizon Communications said it had teamed up with Redbox parent company Coinstar to provide a movie and TV subscription service similar to Netflix. While the details were purposely not disclosed, Verizon said it would own a 65-percent stake in the joint venture, providing the streaming portion. Coinstar's Redbox arm, owning 35-percent, would provide the physical media: DVDs and Blu-ray discs.

"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.

This joint venture could mean bad news for Netflix which depends on the USPS to deliver physical content. With Redbox, subscribers to the joint Verizon/Redbox venture could merely walk to the nearest kiosk -- which is seemingly on every street corner -- to retrieve and return movies rather than wait for the mail as subscribers do with Netflix.

But now there's an interesting twist which should make Netflix even more nervous. Coinstar announced on Tuesday that Redbox has agreed to purchase assets of NCR Corporation's entertainment line of business for up to $100 million. These assets include DVD kiosks, certain retailer contracts, and DVD inventory.

However the DVD kiosks in question are roughly 9,000 existing Blockbuster kiosks, meaning Redbox and Verizon will claim even more street corner territory. Redbox, which currently has 35,400 kiosks installed nationwide, will rebrand the acquired Blockbuster kiosks with its Redbox label.

"We are very pleased to enter into this agreement with NCR," said Scott Di Valerio, chief financial officer of Coinstar, Inc. and interim president of Redbox. "As the global self-service solutions leader, NCR has strong technology, manufacturing and servicing capabilities, and we look forward to leveraging their expertise as Coinstar continues to grow its core automated retail businesses and expands its offerings."

Last year, reports surfaced that Blockbuster would possibly launch its own Netflix killer, a separate service from the version it supplies to Dish Network. But the rival service was eventually revealed to be a gimmick in recruiting potential Dish Network subscribers, offering streaming and physical media provided by Blockbuster for one monthly fee. NCR's sale of Blockbuster's kiosks could be a sign that the video retailer is pulling out of the street corner business, and focusing on Dish Network instead.

Redbox will likely move previously-owned Blockbuster kiosks -- those physically residing next to Redbox kiosks -- to other locations to expand the upcoming Verizon-Redbox service.

Verizon Communications did not comment on the purchase.

Kevin started taking PCs apart in the 90s when Quake was on the way and his PC lacked the required components. Since then, he’s loved all things PC-related and cool gadgets ranging from the New Nintendo 3DS to Android tablets. He is currently a contributor at Digital Trends, writing about everything from computers to how-to content on Windows and Macs to reviews of the latest laptops from HP, Dell, Lenovo, and more. 

  • Who do you think already controls the movie rental business? Mom & pop shops? Get real, big corporations ALREADY control the movie industry lol.

    Anyway, I hate redbox. You pay something like $1.25/day now and have to return it by 9pm or some asinine time the next day. It's actually more of a pain in the ass than checking my mailbox. I'd rather have a movie for a week than the pressure of knowing i absolutely MUST watch it that night if I intend to return it the next day.
  • leadpoop
    Redbox is awesome. I think the times are perfect, I mean come on if you can't get a movie back by 9 pm the next day your just lazy. I doubt I would pay much more that 1.50 a movie but as it stands right now im ok with it.
  • Star72
    @ leadpoop

    Some people with families may have circumstances that prevent them from watching the movie that night which they had planned. If that person also has to work late into the early evening then they are most likely out of luck to see the movie at all. The times don't work for everyone, don't be so quick to judge.
  • lamorpa
    I'd use Redbox, but they don't have a kiosk at my house...
  • hoofhearted
    lolverizon...and have to return it by 9pm or some asinine time the next day.
    That is what DVDFab, ISOs, a NAS and several XBMCs are made for DIY DVR/On Demand service
  • If you are finding yourself dissapointed by the return times for renting a Redbox video, consider yourself not in Coinstar's target market. The Redbox service is designed to reach out to people who want to rent a movie on the fly, not be charge an unacceptable rental fee and can bring the movie back within a day. The reason they have been successful is not because they rent a movie out for a week at $1.50.
  • lamorpa
    otacon72A whopping $1.25 a day.... some people.Since it's nothing to you, please send me $450 for next year's fees.... some people.
  • Anomalyx
    This could be quite a change from Netflix. For those who cycle through Netflix rentals very quickly, Netflix throttles them by delaying their shipments. There is a set price per rental that Netflix has, and if you start to rent fast enough to cross that threshold, they'll insert artificial delays into the system. The Redbox concept would remove the potential for such delays, making it consumer-friendly for those willing to travel to a kiosk.