Verizon and Coinstar said they would kick off a co-venture that will allow customers to obtain DVDs at Redbox’s 35,000-plus kiosks and view content streamed online. Details regarding branding, pricing and content were not released, although a launch is expected in the second half of the year.
Verizon will take a 65% stake, with Coinstar getting the balance. Coinstar will make a $14 million cash contribution to begin.
While the service will compete with Netflix, some of the intensity may be determined by whether it intends to offer TV content, which Netflix is increasingly emphasizing. Redbox offers films and began providing video games in the middle of last year.
Netflix, meanwhile, has moved into original content with the release Monday of “Lilyhammer.” The service may be similar to Dish Network’s Blockbuster, which has stores and online distribution. It would be surprising if it does not include "Redbox" in the brand, since that has considerable equity.
The announcement is a plus for content providers, which will now have another entrant to drive up prices.
Verizon executive Bob Mudge stated that “our powerful brands; our national rental kiosk footprint; our anytime, anywhere network presence; and our mutual commitment to customer-focused innovation” are at the core of the venture.