Look out, Netflix. Redbox, which also announced the acquisition of rival Blockbuster Express today, has teamed up with Verizon to offer a video-on-demand service. The new service will be available nationwide later this year, and will feature a download option—something Netflix is lacking.
Here are the known details of the deal, courtesy of GigaOM:
Verizon will own 65 percent of the joint venture while Coinstar, Redbox’s parent company, will own 35 percent.
The service will offer something Netflix currently doesn’t — a download option, which makes it more competitive with Amazon’s video offerings.
The offering will be available nationwide, not merely to Verizon customers.
Using Redbox helps the joint venture get access to new releases as content companies are trying to add more “windows†to the movie release process. Windowing is what content companies use to spread out the time between a movie released in theaters, when it hits rentals stores and when it makes its way to other services such as premium TV channels. The general thinking is this increases profits for each movie, but opinion is divided on that, and consumers hate it.
Verizon is counting on its existing relationship as a pay TV provider to get more content to the joint venture.
Whatever the end product looks like, it will launch in the second half of this year.
This is a huge deal, and should make Netflix a bit nervous. It helps Redbox get access to new content and will also drive traffic to Verizon’s networks, including its ultra-high speed FiOS areas.
Despite the lack of details, this new service seems pretty interesting. Is it something you would consider paying for, Insiders?
