Light Reading
Redbox is removing its DVD rental kiosks, and its streaming service is struggling for subscribers.

Redbox Falls Flat in Streaming Space

Mari Silbey
5/27/2014
50%
50%

Timing is everything. While Netflix has made a (relatively) graceful transition from a DVD rental service to an online streaming powerhouse, Redbox is finding it difficult to follow a similar path several years later.

According to The Wall Street Journal (subscription required), Redbox Automated Retail LLC will remove more than 500 of its retail kiosks throughout the US this year. The move comes after the company registered revenue increase of only 3% to nearly $2 billion in 2013 and shows no signs of growth in 2014. Likewise, Redbox's operating income flattened out at $239 million last year.

Worse for Redbox, the company appears to be having trouble gaining traction with its online streaming video service. Parent company Outerwall Inc. said in February that Redbox Instant by Verizon added customers last year, while also increasing overall rental transactions and average monthly streaming times. However, the company declined to disclose any numbers, and executives said they would have to work with partner Verizon Communications Inc. (NYSE: VZ) to determine the best way to share details in the future. (See Redbox Instant Grows, But How Much?)

The WSJ now suggests that the detailed picture isn't pretty. At least compared to its much larger rival, Netflix Inc. (Nasdaq: NFLX), Redbox's subscriber numbers are low, and there's no clear strategy in place to reverse the company's streaming fortunes.

Even as Redbox stumbles, other companies are still investing heavily in their own over-the-top video offerings. Amazon.com Inc. (Nasdaq: AMZN) is using its deep pockets to commission original content for its Amazon Instant Video service. The online retailer also continues to seed the consumer market with its lineup of streaming hardware products, including the new Fire TV. (See Amazon Joins Video Streaming Wars.)

Meanwhile, Comcast Corp. (Nasdaq: CMCSA, CMCSK) is quietly but steadily building up Streampix, its own OTT subscription rental service, and AT&T Inc. (NYSE: T) recently partnered with The Chernin Group in a joint $500 million venture to "acquire, invest in, and launch online video businesses" later this year. (See AT&T Joins OTT Video Parade.)

Dish Network LLC (Nasdaq: DISH) also has plans in the works to launch an OTT service with content from Walt Disney Co. (NYSE: DIS) -- including TV shows from Disney-owned networks like ESPN, the Disney Channel, and ABC -- and other programmers as early as this summer. (See No Mickey Mouse Deal for Dish.)

— Mari Silbey, special to Light Reading

(7)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
FakeMitchWagner
100%
0%
FakeMitchWagner,
User Rank: Lightning
5/29/2014 | 2:01:52 PM
Re: Why?
KBode - As Steve Jobs said, innovation and creativity means saying "no." But multibillion-dollar-companies aren't good at that. Too many stakeholders have a claim to the user screen. The result is a cluttered user interface as everybody inside the company fights to get their pet project included. 
KBode
50%
50%
KBode,
User Rank: Light Sabre
5/28/2014 | 3:53:04 PM
Re: Why?
True. They really struggle with graphic user interfaces, but executives always seem to assume that it shouldn't be that hard if they're willing to just throw money at it. But you don't just magically go from a phone company with a focus on turf protection to a disruptive innovator in a new field by magic. They don't seem to recognize this, and you see the same scenario play out over and over again...
FakeMitchWagner
50%
50%
FakeMitchWagner,
User Rank: Lightning
5/28/2014 | 3:37:26 PM
Re: Why?
Service providers seem to have difficulty providing applications. For example, they can't make a DVR people like as much as TiVo. 
pcharles09
50%
50%
pcharles09,
User Rank: Light Beer
5/27/2014 | 7:56:00 PM
Re: Why?
I think their market position is viewed as a 'grab a DVD from outside the supermarket'. It's hard to shift that to something else. Not to mention -- expensive.
wanlord
50%
50%
wanlord,
User Rank: Light Sabre
5/27/2014 | 4:10:05 PM
Re: Why?
Look at it from a subscriber perspective, if I am into online streaming, chances are I already have an account with Netflix, so what is going to pursuade me to switch or add, and now pay for yet another service and looks to have less compelling content, and the fact that Netflix has some pretty good orginal shows right now (OITNB, HOC)? I never understood why Redbox "needed" to partner with VZ in the first place. They are still doing OTT, so what value does being part of VZ add, other than you just lost advertising to 5M potential FiOS TV subs for reasons Kbode mentioned.
KBode
50%
50%
KBode,
User Rank: Light Sabre
5/27/2014 | 2:38:23 PM
Re: Why?
I think they've just run out of growing room on the physical space. And in the streaming space Verizon has a vested interest NOT to promote this service too much in order to avoid cannibalizing traditional FiOS TV viewers and encouraging cord cutting. I get the feeling that AT&T, Comcast and AT&T offer "me too" Netflix-esque services to give the faint impression of being innovative, but they in reality don't want them to succeed or disrupt.
FakeMitchWagner
50%
50%
FakeMitchWagner,
User Rank: Lightning
5/27/2014 | 2:27:58 PM
Why?
Any indication why Redbox is stumbling here where others are doing well?
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
LRTV Documentaries
Sprint's Network Evolution

7|24|14   |   14:59   |   (0) comments


Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
LRTV Documentaries
BTE Keynote: The Software-Defined Operator

7|24|14   |   18:43   |   (1) comment


Deutsche Telekom's Axel Clauberg explains the concept of the software-defined operator to the Big Telecom Event (BTE) crowd.
Light Reedy
Numbers Are In: LR's 2014 Salary Survey

7|24|14   |   1:25   |   (5) comments


Our fourth annual Salary Survey paints a picture of who's hiring, firing, earning, and yearning for a change in the telecom industry.
LRTV Custom TV
Driving the Network Transformation

7|23|14   |   4:29   |   (0) comments


Intel's Sandra Rivera discusses network transformation and how Intel technologies, programs, and standards body efforts have helped the industry migration to SDN and NFV.
LRTV Custom TV
Distributed NFV-Based Business Services by RAD

7|18|14   |   5:38   |   (0) comments


With the ETSI-approved Distributed NFV PoC running in the background, RAD's CEO, Dror Bin, talks about why D-NFV makes compelling sense for service providers, and about the dollars and cents RAD is putting behind D-NFV.
LRTV Custom TV
MRV Accelerating Packet Optical Convergence

7|15|14   |   6:06   |   (0) comments


Giving you network insight to make your network smarter.
LRTV Custom TV
NFV-Enabled Ethernet for Generating New Revenues

7|15|14   |   5:49   |   (0) comments


Cyan's Planet Orchestrate allows service providers and their end-customers to activate software-based capabilities such as firewalls and encryption on top of existing Ethernet services in just minutes.
LRTV Custom TV
Symkloud NVF-Ready Video Transcoding, Big Data

7|9|14   |   3:41   |   (0) comments


Kontron and ISV partner Vantrix demonstrate high-performance video transcoding and data analytic solutions on same 2U standard platform that is ready for SDN and NFV deployments made by mobile, cable and cloud operators.
LRTV Huawei Video Resource Center
The Evolving Role of Hybrid Video for Competitive Success

7|4|14   |   4:09   |   (0) comments


At Huawei's Global Analysts Summit in Shenzhen, China, Steven C. Hawley from TV Strategies speaks to us about the evolving role of hybrid video for competitive success.
LRTV Huawei Video Resource Center
How CSPs Leverage Big Data in the Digital Economy

7|4|14   |   4:48   |   (2) comments


Justin van der Lande from Analysys Mason shares with us his views on how telecom operators can leverage customer asset monetization with big data. His discusses the current status of big data applications and the challenges and opportunities for telecom operators in the digital economy era.
LRTV Huawei Video Resource Center
Accelerator for Digital Business Future Oriented BSS

7|4|14   |   3:08   |   (0) comments


Mobile and internet are becoming intertwined; IT and CT are integrating; and leading CSPs have begun to transform to information service and entertainment providers. How should the BSS system evolve to enable this transformation? Karl Whitelock, an analyst at Frost & Sullivan, shares his views.
LRTV Huawei Video Resource Center
Orange Tunisia Discusses Multi-Band Antenna With EasyRET Solution

7|4|14   |   2:45   |   (0) comments


As new site acquisition becomes more difficult, Orange Tunisia has requested multi-band antenna to support UMTS and LTE innovation. Some things considered include reducing the cost of antenna maintenance and having high reliability antenna and EasyRET solution.
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
October 29, 2014, New York City
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
Allot's latest MobileTrends Charging Report shows that value-based pricing plans are up from 35% in 2011 to 85% in 2014.
Today's Cartoon
Hot Topics
The Municipal Menace?
Jason Meyers, Senior Editor, Utility Communications/IoT, 7/22/2014
Cisco Puts a Fog Over IoT
Sarah Reedy, Senior Editor, 7/23/2014
GM: 10 Car Models on Road With AT&T's LTE
Dan Jones, Mobile Editor, 7/18/2014
Apple Earnings: Strong iPhone Sales, iPad Sales Slump, $7.8B Profit
Mitch Wagner, West Coast Bureau Chief, Light Reading, 7/22/2014
Like Us on Facebook
Twitter Feed