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
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?
Flash Poll
LRTV Huawei Video Resource Center
IHS Analyst Discusses eLTE at CCW 2014

9|10|14   |   7:09   |   (0) comments


Thomas Lynch, associate director of critical communications at IHS Technology, talks about broadband in critical communications.
LRTV Huawei Video Resource Center
TCAA on Huawei eLTE: A Broadband Solution for Mission-Critical Communications

9|10|14   |   2:29   |   (0) comments


At CCW2014 in Singapore, the TCCA's Phil Kidner talks about the importance of broadband data for critical communications.
LRTV Custom TV
Spotlight on Cisco: SDN for Optical Networks

9|8|14   |   9:27   |   (0) comments


Cisco's Greg Nehib talks OpenFlow and more on the 'Software-Defined Networking for Optical Networks' panel at the Big Telecom Event in June 2014.
LRTV Custom TV
Cisco's Evolved Programmable Network (EPN)

9|8|14   |   4:05   |   (0) comments


A look at the various demos Cisco showed at Light Reading's Big Telecom Event highlighting Cisco's EPN innovation and how SDN and NFV technologies are enabling a variety of new services.
LRTV Huawei Video Resource Center
The Future of Ultra-Broadband, With Kevin Kelly (UBBF2014)

9|5|14   |   1:13   |   (0) comments


If you think the technological changes we've seen up to now are astounding, just wait until you see what the future has in store. Discuss upcoming breakthroughs with Kevin Kelly, Founding Executive Editor of Wired Magazine, at the Huawei Ultra-Broadband Forum on September 24.
LRTV Huawei Video Resource Center
The Inaugural Optical Innovation Forum in Nice

9|2|14   |     |   (0) comments


More than 170 attendees from network operators, service providers, analyst firms, and component companies from around the world convened in Nice in June for the inaugural Optical Innovation Forum, co-produced by Huawei and Light Reading.
Wagner’s Ring
Data Centers Drive Telcos Into the Future

8|28|14   |   2:20   |   (2) comments


Data centers are at the heart of key trends driving telecom -- network virtualization, the drive for increased agility, and the need to compete with OTT providers.
LRTV Custom TV
Why SPs Should Consider Cisco's EPN

8|27|14   |   5:40   |   (0) comments


Sultan Dawood from Cisco discusses Cisco's EPN, which enables SPs to build agile and programmable networks delivering new network virtualized services using Cisco's Evolved Services Platform (ESP).
LRTV Huawei Video Resource Center
Huawei’s Showcase @ Big Telecom Event 2014

8|26|14   |   2.56   |   (0) comments


SoftCOM is Huawei's framework for telecom business and network transformation. Haofei Liu, Solution Marketing Manager, Carrier Business Group, Huawei, showcases Huawei's SoftCOM architecture in this video.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of Integrated Solutions on SoftCOM & NFV Monetization

8|26|14   |   4.43   |   (0) comments


Libin Dai, Director of Integrated Solutions, Carrier Business Group, discusses Huawei's SoftCOM and NFV monetization. Huawei believes that NFV monetization should be service-driven rather than network-driven, and that operators should have network transformation, service transformation and a compatible and collaborative ecosystem in place in order to deploy NFV.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of US NFV Lab on CloudEdge & the Future of NFV

8|26|14   |   4.06   |   (0) comments


Sean Chen, Director of US NFV Lab at Huawei, discusses Huawei's new approach to NFV in open collaboration. Huawei believes that through Proof of Concept tests, it could help operators learn and communicate with the industry more effectively. Sean believes that successful implementation of NFV should have its values reaching to end users and discusses how Huawei's ...
LRTV Huawei Video Resource Center
Huawei's Highlights @ Big Telecom Event 2014

8|26|14   |   3.34   |   (0) comments


At the Big Telecom Event in Chicago Huawei showcases its high-level strategy, the SoftCOM architecture, which helps operators reduce the cost of ownership of their network infrastructure and generate additional revenue in the ICT service environment. Huawei showcases over 30 pilot programs from across the globe, focusing on the industry-leading commercial ...
Upcoming Live Events!!
September 23, 2014, Denver, CO
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
A survey conducted by Vasona Networks suggests that 72% of mobile users expect good performance all the time, and they'll blame the network operator when it's not up to par.
Today's Cartoon
Vacation Special Caption Competition Click Here
Latest Comment
Hot Topics
Introducing 'The New IP'
Steve Saunders, CEO and founder, Light Reading, 9/11/2014
Glimpsing the Self-Driving Car
Dan Jones, Mobile Editor, 9/12/2014
AT&T to Launch WiFi Calling in 2015
Sarah Reedy, Senior Editor, 9/12/2014
AT&T: We'll Bundle Fixed Wireless & DirecTV
Mari Silbey, Independent Technology Editor, 9/15/2014
Connecticut Cities Crowdsource Gigabit Nets
Jason Meyers, Senior Editor, Utility Communications/IoT, 9/15/2014
Like Us on Facebook
Twitter Feed