Redbox CEO drops hints about Verizon streaming partnership

Rich Fiscus
7 Feb 2012 18:36

The partnership between Redbox and Verizon to offer a subscription streaming and disc rentals could represent the biggest competitive threat Netflix has ever faced.
A press release announcing the deal didn't offer any real details beyond a third quarter launch date and plans for multiplatform device support. A website setup to promote the new venture doesn't add any new information.

Since then, executives from Redbox and their parent company Coinstar have dropped some hints to FastCompany. While they seem to suggest the exact details haven't been worked out yet, it appears the Redbox component may be fairly limited. Coinstar CFO and interim Redbox CEO Scott Di Valerio explained:

the way I would say it is that rental nights or 'Nights at the Kiosk' will be a kind of center point. And what do we have in our kiosks? Standard [DVDs], Blu-ray, and video games.

That would seem to indicate subscribers may be limited to free Redbox rentals only on certain nights. Offering free rentals only valid on a particular day has been a favorite promotional tactic of Redbox for years. At one time they offered one free disc every Monday, with a coupon code delivered by SMS.

One thing Di Valerio did make clear was they don't plan to add a disc by mail service. Coinstar CEO Paul Davis explained their reasoning:

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.

Given that Redbox primarily concentrates on new releases, it seems to makes sense to stick with kiosks for the disc side of things. A disc by mail plan would require a significant investment in warehouses and discs. Instead they appear to be figuring on Redbox providing new releases to go with catalog titles on the streaming side.