Verizon & Redbox Boot Up Web Video Service
A joint video rental and streaming service from Verizon Communications Inc. (NYSE: VZ) and Redbox Automated Retail LLC that's poised to battle with Netflix Inc. (Nasdaq: NFLX) is reportedly in "alpha" testing as the venture boots up a website and reveals the execs who will run it.
AllThingsD says initial testing is already underway, with a full launch expected later this year.
Verizon and Coinstar announced their partnership in February, but didn't say much about what the resulting product would look like or how much it would cost. They're still mum on those details, but they do have a Redbox-branded logo for the service, to be called Redbox Instant by Verizon. Verizon owns 65 percent of the venture, with Redbox holding the remaining 35 percent.
In a blog posted Tuesday (registration required), BTIG Research analyst Richard Greenfield speculated that the Redbox/Verizon combo will cost $10 to $12 per month with unlimited streaming of the J.V.'s online catalog, and offer access to newer titles using credits that can be redeemed at Redbox's DVD rental kiosks. AllThingsD believes the product will emphasize movies more so than TV shows and series.
While still short on product details, the J.V. has revealed the execs who will run it, starting with CEO Shawn Strickland, who helped Verizon get FiOS off the ground. Four other Verizon FiOS execs are joining his team: Chief Technology Officer Jack Gallaher; Chief Product Officer Joe Ambeault; VP of Business Development and Performance Management Pete Castleton; and VP of Customer Operations Tina Altmann. Redbox's ex-VP of Marketing Amy Gibby has joined the group as chief marketing offer.
Why this matters
For Netflix, it means it's about to face some new competition with deep pockets. The number of FiOS execs heading over to run it speaks to the importance Verizon is placing on the new joint venture as more consumers go online to fulfill their video entertainment needs. The Verizon/Redbox service is also coming into view after Comcast Corp. (Nasdaq: CMCSA, CMCSK) launched Streampix, a premium-level VoD and Web video streaming service that some view as a way to blunt an emerging cord-cutting trend.
— Jeff Baumgartner, Site Editor, Light Reading Cable