Verizon and Redbox team up to launch Netflix killer

Netflix is about to get some high powered competition. Today, Verizon and Coinstar announced a new partnership that will create a service that combines a streaming video system from Verizon with the physical DVD and Blu-Ray rental service operated via Coinstar's many Redbox kiosks.

The two companies have created an infographic, shown below, that gives a general idea of how the new service will work:

Verizon will own 65 percent of the new venture with Coinstar responsible for the other 35 percent. The service is expected to launch in the second half of 2012. The press release states:

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.

There's no word on what specific content will be made available on this new service.

While Netflix is not seen as the all powerful business it once was, it is still the leader in offering streaming movie and TV shows here in the US. In January it announced that its streaming subscriber rate had increased once again, gaining 220,000 US subscribers and adding 1.86 million overseas subscribers.

Image via Verizon/Coinstar

Report a problem with article
Previous Story

BTJunkie torrent file site shuts down after seven years

Next Story

TechSpot: Intel SSD 520 Series 240GB Review

25 Comments

Commenting is disabled on this article.

If they get One Piece, I'll never go back to Hulu.

What I have to wonder is if they will permit the return of mailed RedBox DVDs to RedBox kiosks.

What's interesting to me about this is that Verizon already has a partnership with Microsoft to have their FIOS app on the XBox. Could we see a Version of this service on the XBox as a method of getting immediate distribution? Probably.

Even if this new Verizon services is a complete flop, it will still put some heat on Netflix to remain attractive to their customers. It's a given that Netflix will lose some customers to Verizon, so a new competitor is always a win-win for the customer.

I welcome any competition. Netflix streaming catalog keeps shrinking. Amazon Prime video library is abysmal. Maybe a 3rd competitor will make a difference.

Many of us still prefer a physical DVD.

5-minute drive for 68% of the US population vs. 5-second walk to the mailbox...hmm

John S. said,
Many of us still prefer a physical DVD.

5-minute drive for 68% of the US population vs. 5-second walk to the mailbox...hmm


The thing is, Redbox machines are generally located right at the entrance to places that people go on a regular basis anyway (drug stores, Walmart, grocery stores, etc.), so the 5 minute vs. 5 second thing doesn't really come into the picture for most people.

Since Netflix has such a ubiquitous presence on set-top boxes, Blu-Ray players, and mobile devices, they are going to have one hell of an uphill battle to fight before they gain any significant portion of the market.

roadwarrior said,
Since Netflix has such a ubiquitous presence on set-top boxes, Blu-Ray players, and mobile devices, they are going to have one hell of an uphill battle to fight before they gain any significant portion of the market.

But a company the size of Verizon could afford to do it.

Frazell Thomas said,

But a company the size of Verizon could afford to do it.


Being able to afford to is one thing, but the problem is they have a long road ahead of them. Do you really think they are going to convince every device maker out there to release updates for current hardware to support their service? And even if they do, how long do you think that is going to take? Netflix is already there, and has been for some time now. Potential customers are going to look at Verizon's service and compare it to Netflix. When they see that Netflix is supported on practically everything around, and Verizon isn't, which one do you think they are going to use?

roadwarrior said,

Being able to afford to is one thing, but the problem is they have a long road ahead of them. Do you really think they are going to convince every device maker out there to release updates for current hardware to support their service? And even if they do, how long do you think that is going to take? Netflix is already there, and has been for some time now. Potential customers are going to look at Verizon's service and compare it to Netflix. When they see that Netflix is supported on practically everything around, and Verizon isn't, which one do you think they are going to use?

Verizon could also tell the mobile device OEMs to build and bundle an app or they'll refuse to sell their device on Verizon Wireless. For any major OEM you need to sell on Verizon to make a decent dent in the US. That is a trump card that Netflix doesn't have...

Frazell Thomas said,

Verizon could also tell the mobile device OEMs to build and bundle an app or they'll refuse to sell their device on Verizon Wireless. For any major OEM you need to sell on Verizon to make a decent dent in the US. That is a trump card that Netflix doesn't have...

Even then, Netflix is already present on all of the major mobile device platforms. And I was referring more to Blu-Ray players, set top boxes, and connected TVs, many (most?) of which already have Netflix apps on them. Verizon doesn't have as much leverage with those OEMs.

roadwarrior said,

Even then, Netflix is already present on all of the major mobile device platforms. And I was referring more to Blu-Ray players, set top boxes, and connected TVs, many (most?) of which already have Netflix apps on them. Verizon doesn't have as much leverage with those OEMs.

That is an easy one as well. Allow the service to work in place of getting a Verizon set top box for FiOS and OEMs would be pawning at the market opportunity.

The reality is Netflix isn't as cemented as you might think. The OEMs can always add another app to their devices and they would love to since A. Verizon might give them a kickback and B. Users like to see more "apps" when they buy devices. The OEM of a BluRay box doesn't care if you use Netflix, Amazon, Hulu, or Verizon. They just care that you purchased their box and not the next guy.

Also note, we're talking about future devices not today. All that matters is the upgrade cycle on the device to adjust penetration numbers. We are upgrading everything faster now so that pushes the upgrade cycles down.

since verizon is involved, I'd say it wont be a killer, because it willl probably end up costing you $39 a month for the first year and after a 2yr contract balloon to $69 a month and limit the number of times you can watch something, and have horrible billing mistakes too, and they will want to bundle it with your internet service and wireless service

chadlachlanross said,
Netflix is slowly (and occasionally rapidly) killing themselves. It isn't going to take some new service to kill Netflix.

Funny, they reported a huge 4th Quarter recently. Which planet will this happen in?

UndergroundWire said,

Funny, they reported a huge 4th Quarter recently. Which planet will this happen in?

Corporations 'report' things all the time.... doesn't make them true. Hanging around NeoWin should have taught you that. However, my statement happened on the same planet that Netflix alienated a huge portion of their customer base with both doubling the prices, and for that whole Qwikster debacle. In addition, no decent movies, constantly losing even the content they do have.

chadlachlanross said,

Corporations 'report' things all the time.... doesn't make them true. Hanging around NeoWin should have taught you that. However, my statement happened on the same planet that Netflix alienated a huge portion of their customer base with both doubling the prices, and for that whole Qwikster debacle. In addition, no decent movies, constantly losing even the content they do have.

Hanging around Neowin makes me very foolish (based on the many ignorant comments). There is no doubt that Netflix has growth. If you doubt that, you are definitely proving that my first statement is true.

windbreaker11 said,
Funny, I know the programmer that set this up. Knew about this for several months before announcement.

You're -so- cool.

So this means there'll be online streaming of movies or will it be in verizon's TV services and streamed to your device from there?...

Normally anything with the name "Redbox" or "Verizon" in it I stay away from. It'll be interesting to see how hard they faceplant when they fail, though.

GollyJeeWizz said,
Normally anything with the name "Redbox" or "Verizon" in it I stay away from. It'll be interesting to see how hard they faceplant when they fail, though.

Although I am far from having love for either company, they probably will do ok based on the reason both have done well so far.

They are everywhere...

Verizon holds onto customers because of their 3G coverage that is available in tons of rural areas ATT and other don't give a crap about. (Verizon bought out Alltel and others that specialized in providing rural high speed coverage)

I hate Verizon, but because I travel a lot in the US, I HAVE to use their service in a lot of areas, as the dial up like 3rd party carrier support from ATT and others is horrid and isn't even close to the EDGE or 2G speeds, which would be somewhat acceptable.

The same is true of Redbox, families have DVD players in their vehicles and when they travel, it is just easier to grab a movie off Redbox while getting gas and then drop it off later somewhere else, as it is everywhere.

GollyJeeWizz said,
Normally anything with the name "Redbox" or "Verizon" in it I stay away from. It'll be interesting to see how hard they faceplant when they fail, though.

Funny, FiOS and Verizon Wireless are all pretty good services. Never found anything that can top those two. Oh well, ignorance is bliss.