Move over Netflix - Verizon will soon be partnering with DVD rental kiosk company Redbox to provide additional streaming video content options to consumers. Verizon and Coinstar (Redbox parent company) announced a joint venture that they claim will combine "the convenience, simplicity and value of Redbox new release DVD and Blu-ray Disc rentals" with a new video on-demand streaming and download service.
Francis Shammo, Verizon's CFO recently announced an August launch date for product launches, including subscription services. Branding, content details and pricing, will be announced later. According to details of the partnership, Verizon will control 65 percent of the venture.
The joint venture plans to introduce a complete product portfolio in the second half of 2012. According to the partnership announcement, "subscription services 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." Additional brand and product information will be revealed in the coming months.
According to Bob Mudge, President of Verizon Consumer and Mass Business Markets:Netflix Controversy a Sign of the Future; Is Netflix Getting Too Greedy?
"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."
The partners said they are looking to create "a new choice for quality- and value-conscious consumers seeking a simple and affordable way to access the video entertainment they crave." They added: "By offering instantly available online and mobile content with immediate access to physical media through rental kiosks, Verizon and Redbox will be uniquely positioned to deliver the best of both worlds – digital and physical – to consumers across the country."
Coinstar and Verizon have not announced any deals made with Hollywood content providers would provide programming for the streaming video service. Recent content deals between Netlix and major Hollywood studios have failed, making Netflix a vulnerable competitor in the streaming video market.Verizon Challenges FCC Authority to Enforce Net Neutrality Rules
The partnership hopes to create the kind of national multi-platform product that customers are demanding from video entertainment service providers. They are banking on utilizing Verizon's "industry-wide relationships with entertainment content providers, its advanced cloud computing technologies and state-of-the-art IP network infrastructure to distribute video on-demand content to its customers."
“Consumers rely on Redbox for the latest new release movies at a great value, and our joint venture with Verizon will enable us to bring them even more value by offering expanded content offerings and greater flexibility for how and when they enjoy entertainment,” said Paul Davis, CEO of Coinstar.
The venture will be funded with $450 million from its partners, according to the terms of the partnership agreement.