& cplSiteName &

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        ADD A COMMENT
Mitch Wagner
100%
0%
Mitch Wagner,
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...
Mitch Wagner
50%
50%
Mitch Wagner,
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.
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
5/27/2014 | 2:27:58 PM
Why?
Any indication why Redbox is stumbling here where others are doing well?
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
ETSI's CTO Talks NFV, 5G & NGP

12|5|16   |   09:45   |   (0) comments


Adrian Scrase, CTO at standards body ETSI, talks about the various initiatives and specifications developments related to NFV, 5G and NGP (next-generation protocols) that will underpin next-gen networks.
Women in Comms Introduction Videos
Korn Ferry Consultant: How to Find, Cultivate & Be the Best Talent

11|30|16   |   4:10   |   (1) comment


Erin Callaghan, a managing consultant for Korn Ferry Futurestep, shares strategies for companies to improve how they recruit and for women to ensure they don't get lost in the pipeline.
LRTV Custom TV
We Can Make the World More Sustainable

11|29|16   |     |   (0) comments


GeSI is a global e-Sustainability Initiative organization bringing together 40 big multinational companies around the world. According to GeSI's report, information and communication technology can make the world more sustainable. Luis Neves, chairman of GeSI, shared with us his opinion at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
Finding a New Way to Engage Customers & Drive Revenue

11|29|16   |     |   (0) comments


Mobile revenues are declining. Digicel, a player in the Caribbean telecommunications/entertainment space, has found a new way to engage customers and drive revenue. John Quinn, CTO of Digicel, shared with us its story at Ultra-broadband Forum (UBBF2016)
LRTV Custom TV
Do You Really Need Gigabit Infrastructure?

11|29|16   |     |   (0) comments


Altibox is the biggest fiber-to-the-home (FTTH) player and the largest provider of video and TV in Norway. They started out with zero customers in 2002. Now they have close to half a million households and companies attached to their FTTH business. Nils Arne, CEO of Altibox shared with us their story and insight on 5G at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
BTís Openreach Strategy & Its Updates in 2016

11|29|16   |     |   (0) comments


A lot of developments at Openreach this year in terms of strategy and planned investments. Peter Bell, CIO of Openreach BT, shared with us the updates of Openreach at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
ITU: The Broadband Is Our Future

11|29|16   |     |   (0) comments


At Ultra-broadband Forum, Houlin Zhao, Secretary General of ITU, discussed how important it is for countries, companies and everybody to be working together to help to build the broadband and digital economies (UBBF2016).
LRTV Custom TV
Tackling 5G in Dallas

11|28|16   |     |   (0) comments


Here are our highlights of the 5G North America show in Dallas, Texas with Light Reading's Dan Jones.
LRTV Interviews
Cox Prepping for Virtualization Trials

11|14|16   |     |   (0) comments


In this video interview, Cox's Jeff Finkelstein discusses MSO's plans to test managed business services in early 2017 and tackle Distributed Access Architectures.
LRTV Custom TV
Drivers & Potential of NGP

11|11|16   |     |   (0) comments


ETSI has created an Industry Specification Group to work on Next Generation Protocols (NGP ISG), looking at evolving communications and networking protocols to provide the scale, security, mobility and ease of deployment required for the connected society of the 21st century. The NGP ISG will identify the requirements for next generation protocols and network ...
LRTV Custom TV
Huawei IP 2020 for Future Networks

11|11|16   |     |   (0) comments


Future Networks should satisfy many requirements such as high throughput, extremely low latency, flexible mobility, intrinsic security, networking automation, and so forth. The Chief Architect of Huawei Future Networks addresses a holistic solution, i.e., IP 2020, to achieve these requirements for various future life scenarios (e.g., autonomous driving, tactile ...
LRTV Custom TV
Digital Object Architecture

11|11|16   |     |   (0) comments


Digital Object Architecture provides a basic information infrastructure that can facilitate interoperability between or among different systems, processes, and other information resources, including different identity management systems. Digital objects are networked objects that are named by digital object identifiers and instantiated by an infrastructure service ...
Upcoming Live Events
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Cable Nodes Becoming a Choke Point
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 12/5/2016
Apple Seeds 5G? Seeks 'Multi-Gigabit' Chip Designer
Dan Jones, Mobile Editor, 11/30/2016
Altice Plans FTTH for Entire US Footprint
Iain Morris, News Editor, 11/30/2016
Altice FTTH Bill Could Hit Almost $9.6B in US
Iain Morris, News Editor, 12/1/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Live Digital Audio

Even when there's a strong pipeline of female talent in the comms industry, it tends to leak all the way to the top. McKinsey & Company says women experience pipeline leakage at three primary points: being unable to enter, being stuck in the middle or being locked out of the top. Each pipeline pain point presents its own challenges, but also opportunities to stop the leak. Wireless operator Sprint is making a conscious effort to improve its own pipeline from new recruits to the C-suite, and it wants the rest of the industry to do the same. In this Women in Comms radio show, WiC Board Member and Sprint Vice President of Enterprise Sales Nelly Pitocco will give us her take on the industry's pipeline challenges. Pitocco, who joined Sprint in May and has spent 20 years in the comms industry, will also offer solutions, share how Sprint is tackling the challenge within its own organization and take your questions live on air.