Redbox digital service will go toe-to-toe with Netflix
Redbox is gearing up to challenge Netflix head-on, the kiosk DVD rental company confirmed Wednesday.
At a meeting with analysts, Redbox President Mitch Lowe said his company's forthcoming digital option will be subscription-based Internet streaming instead of a transactional service through which consumers pay separately for each movie. A single monthly fee would allow users to access movies on multiple devices and access discs through kiosks.
That means Redbox will be competing directly with Netflix, which has amassed more than 20 million subscribers to its DVD-by-mail and Internet streaming subscription plans.
Redbox has previously said it will launch a digital service with a partner but has not identified the partner. Several people familiar with the matter have confirmed that Amazon.com is in talks with studios to acquire content for a Netflix-like subscription movie streaming service set to launch soon, making it a likely candidate to be Redbox's partner.
Investors have been eager to see Redbox launch a digital service, because consumers are increasingly choosing to watch movies via the Web and not DVD. In Coinstar's last fiscal quarter, Redbox revenue came in below expectations because of the impact of three studios not offering new releases to the company until 28 days after they went on sale.
Redbox was also recently dinged when Walt Disney Studios decided to raise its wholesale prices for DVDs sold to the company.
Related:
Disney raises wholesale price on Redbox and Netflix
Amazon poised to launch online movie service to rival Netflix
Shares of Redbox parent Coinstar hammered on earnings warning
— Ben Fritz
This is irresponsible reporting. If history proves correct everytime some negative press comes out about Redbox (like Disney raising rates) Mitch announces a streaming service (2years running now).
And if you listened to the analyst event they announced nothing other then we are in talks. Well of course they are because they have been plugging this for 2 years now and are no closer today then two years ago. The fact reamins Amazon would not need Redbox for a streaming service and it's rediculous to believe that any studio would be willing to give redbox any content for a streaming service.
This whole story is fluff!!!!
Posted by: Joleen | February 17, 2011 at 07:31 AM
OK, this makes a lot of sense dude. Good stuff.
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Posted by: StangoTango | February 17, 2011 at 08:13 AM
As crappy as the selection is in those Red Box kiosks, the one outside m grocery consistently has a 3 -5 deep line of people waiting to use it. They must be doing somethign right.
Posted by: Brian | February 17, 2011 at 08:27 AM
A hoped-for announcement from Redbox on a digital strategy didn’t materialize Feb. 16 during an investors’ event held by parent company Coinstar.
Analysts had speculated Redbox could use the conference to announce a partner for a streaming subscription service, possibly Walmart or Amazon. Instead, Coinstar CEO Paul Davis and Redbox president Mitch Lowe assured investors that the company would have a digital offering up and running later this year, and noted that negotiations with more than one party were ongoing. One option would be to combine online streaming with DVD rentals at kiosks, they noted.
“We have been talking about it for a while. We’re convinced our brand can expand into this space,” Davis said. “We could have moved a lot quicker a few months ago if we decided to do this on our own. We made a decision not to [do that] because the price was prohibitive.”
Posted by: Joleen | February 17, 2011 at 09:23 AM