Verizon To Set Up Streaming Service With Redbox

Verizon To Set Up Streaming Service With Redbox
Market News
Like Us On Facebook
Like Us On Facebook

Phone company Verizon Communications Inc. will challenge Netflix and start a video streaming service this year with Redbox and its DVD rental kiosks.

Verizon and Coinstar Inc., Redbox’s parent, say the service will be national and available to non-Verizon customers as well. It adds another leg to Verizon’s quest to become a force in home entertainment, and it looks set to compete to some extent with the cable-TV services it already sells.

Verizon has its own cable-TV service, called FiOS, in some areas. Its Verizon Wireless subsidiary has also signed a deal to sell service from Comcast Corp. and other cable companies in its stores.

With the Redbox venture, Verizon is breaking ranks with the cable and satellite industry, which makes its own video streaming services available only to people who also subscribe to its traditional TV feeds. They don’t want households switching to Internet-only services, which are cheaper – Netflix charges $8 per month for its video streaming plan.

Verizon’s own FiOS business is relatively small, with 4.2 million subscribers, making it the seventh-largest provider of TV signals to U.S. homes. Meanwhile, its landline phone business is shrinking, so it needs other avenues for growth. Its wireless arm is growing, but it owns only 55 percent of that venture. (Vodafone Group PLC of Britain owns the rest.)

Verizon and Coinstar didn’t reveal prices or other details of their service. It’s intended to give subscribers access to DVD and Blu-ray discs as well as streaming movies starting in the second half of the year, they said.

New York-based Verizon Communications Inc. will own 65 percent of the unnamed venture, with Bellevue, Wash.,-based Coinstar Inc. owning the rest. Redbox is contributing an initial $14 million to the venture, according to a regulatory filing. It did not say how much Verizon would contribute.

In morning trading Monday, Coinstar’s stock gained 31 cents to $49.97. Verizon shares rose 6 cents to $37.90. Netflix shares fell $3.61, or 2.9 percent, to $122.82.

Netflix already has a couple of powerful competitors with video streaming services. Amazon.com Inc. provides a library of movies and TV shows to subscribers to its Amazon Prime shipping services. Wal-Mart Stores Inc., the world’s biggest retailer, has a streaming service called Vudu.

Neither of these competitors combines Internet delivery of movies with DVDs, like Netflix does. However, Netflix started charging separately for its DVDs-by-mail and online streaming services last year, saying DVDs are on their way out and Internet delivery is its focus.

Netflix alienated customers even more when it said it would split the two services completely, forcing customers to deal with two movie queues. It backed off that plan after an outcry, demonstrating that customers found value in the combination of Internet movies and discs from one company.

Redbox appears to have benefited from Netflix’s troubles, picking up some of the customers who have defected from its DVD service. It now claims to be the biggest DVD rental service in the country, thanks to its more than 28,000 kiosks in drugstores and supermarkets.

Associated Press

Share Tweet
React
Like Us On Facebook
Like Us On Facebook

Preston Waters

Preston Waters is a thinker. He's not your traditional philosophical persona, however, as he leaves no topic untouched. Covering all the bases, from business to women, Preston Waters is the ultimate man's man for Gen-Y.

More In Market News

News Preston Waters

Stocks Off to Stellar Start in May

Stocks were kicking off May in high style Tuesday, posting sharp gains after a much better-than-expected report on U.S. manufacturing activity. The Dow Jones Industrial Average was rising 103 points, or 0.8%, at 13,317, after hitting a four-year high at 13,338. The S&P 500 was up 14 points, or 1%, at 1413, and the Nasdaq was adding 23 points, or 0.7%, at […]

News Preston Waters

Bank Of America, JPMorgan: Dow Midday Movers

U.S. stocks were rising in midday action Tuesday following a better-than-expected read on U.S. manufacturing activity.The Dow Jones Industrial Average was up more than 116 points, or 0.9%, at 13,330. The biggest percentage gainers within the Dow were Bank of America (BAC), JPMorgan Chase (JPM) and Intel (INTC). Shares of Bank of America rose 2.59% to $8.32. The bank said Tuesday it plans to lay […]

News Preston Waters

Monster Stocks Soar Amid Rumors Coca-Cola Is Set To Buy Energy Drink

Monster Beverage Corp’s shares soared on Monday following a report that Coca-Cola Co. was considering buying the energy drink maker. The Wall Street Journal cited unnamed people in reporting that the world’s biggest soft drink maker was in talks to buy Monster. If a deal transpired, Monster would be Coca-Cola’s largest brand acquisition ever. Monster declined […]

News Preston Waters

Stocks Surge After Strong Manufacturing Report

Stocks were surging in morning action Tuesday after a much better-than-expected report on the pace of national manufacturing activity in April.The Dow Jones Industrial Average was rising 80 points, or 0.6%, at 13,294. The S&P 500 was up 12 points, or 0.8%, at 1410, and the Nasdaq was adding 29 points, or 1%, at 3075. Stocks finished modestly lower Monday, marking […]

News Preston Waters

Bank Of America Keeps Shrinking

Bank of America (BAC)’s plan to lay off some of its highest-paid executives looks like the right response to the current banking environment. The Wall Street Journal reported Tuesday the bank will cut 2,000 positions in its investment banking, commercial banking and non-U.S. wealth-management units targeting “the high-earning employees whose efforts helped Merrill Lynch account for the bulk of […]

News Preston Waters

Stock Market Story: May 1

The first trading day of May got off to a mixed start early Tuesday with all three major U.S. equity indices honing to close to the flat line ahead of a key report on the pace of U.S. manufacturing activity in April. The Dow Jones Industrial Average was down 9.5 points, or 0.07%, at 13,204.The S&P 500 was up less than a […]

Also On Elite

Film

Channing Tatum’s New ‘Dick Graze’ Trend Is Not One To Try In Public (Video)

“22 Jump Street” is about to be released on iTunes. In order to promote the film, Channing Tatum made a hilarious music video. It’s about the “Dick Graze,” a new craze supposedly sweeping the nation. OK, it’s not really sweeping the nation, but maybe it will if enough people watch this video. Basically, the “dick graze” is […]

World

Seeing A 7-Week-Old Baby Hear For The First Time Is Absolutely Priceless (Video)

If you’ve ever been around babies, you know how incredible they can be — it’s like you can actually see their little brains at work, learning every second of the day. This video is a glimpse of that magical moment when a baby discovers something for the first time. According to Time magazine, Lachlan, the 7-week-old baby […]