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Is Redbox Instant Shutting Down?

Mari Silbey
9/30/2014

Redbox Instant by Verizon may be rapidly approaching its end.

In a new GigaOM report, Janko Roettgers presents a compelling series of data points suggesting the over-the-top video service is on its way out. First, Redbox Instant isn't signing up any new customers. Thanks to a credit card fraud issue, the company has halted all new customer registrations "to make sure that criminals are not misusing our system to hurt innocent third parties." (It appears no current customer information has been compromised.)

That news wouldn't sound so dire, except that apparently the gates have been closed for three months already. And subscriber numbers weren't so hot even before the shutdown. (See Redbox Falls Flat in Streaming Space.)

Second, a Reddit user posted a rumor recently that Redbox Instant would be turned off entirely as of October 1. Roettgers asked for details from the company, but received only a curt "no comment." Light Reading also reached out to Verizon Communications Inc. (NYSE: VZ), but a Verizon spokesman said,"Redbox Instant by Verizon declines to comment."

Third, Redbox Automated Retail LLC is doing its best not to shine a spotlight on its joint venture with Verizon. On the Redbox website home page, there's no mention at all of Redbox Instant. And as Roettgers points out, the one page on the site that does mention the streaming service doesn't even provide a link.


Keep up with the latest in OTT video developments on our dedicated OTT video content channel here on Light Reading.


It's possible that Verizon is backing away from Redbox Instant in order to focus on the new mobile IP video service that it plans to launch next year. Verizon CEO Lowell McAdam said earlier this month that his company would use the OnCue assets it picked up from Intel Corp. (Nasdaq: INTC) earlier this year to kick off its new TV service in the first half of 2015. (See Verizon Plans Mobile TV Service in 2015 and Why Did Verizon Buy OnCue?)

In the meantime, however, the Redbox Instant rumors are helping to build the case against pay-TV providers trying to break into the subscription video-on-demand business. The rumors come on the heels of news that rival Comcast Corp. (Nasdaq: CMCSA, CMCSK) is changing strategy with its Streampix SVoD service. Specifically, Comcast is getting rid of its Streampix mobile apps and website, and has said "the Streampix service will simply be part of the Xfinity TV app and website, like other VoD offerings." (See Comcast Turns Off Streampix.)

Pay-TV providers are learning the hard way that it's not easy to compete with Netflix Inc. (Nasdaq: NFLX). The value of the OTT company's vast content library combined with its low monthly fee make Netflix a very hard act to follow.

— Mari Silbey, special to Light Reading

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Mitch Wagner
Mitch Wagner
9/30/2014 | 11:42:40 AM
Netflix is fascinating
Netflix is a fascinating business model. It's so simple on the surface -- you'd think an incumbent could take it down easily. That was particularly true in its red-envelope days, before it offered a streaming service. 

Mailing out DVDs? How hard can that be?

Turns out "very," apparently. 
jabailo
jabailo
9/30/2014 | 12:13:45 PM
Re: Netflix is fascinating
I've thought as much.   The company seems generic enough -- put videos on server, charge monthly fee -- that it would be easily to duplicate, especially with universal cloud technology (Netflix is built on Amazon's).

However what I find with these "generic" companies is that, like soap and cereal, there is a combination of brand loyalty, low cost pricing and subtle deliniation that keeps them brand leaders.

For example, if you try to understand Netflix as simply an online video store, it makes little sense.  Many of the movies are unknown, small budget, non-first runs.  And those that are high quality are trickled out, few and far between.

So, what Netflix is, in my opinion is more like a channel than a store.  It's something you sit down and watch and can find things that are not great, but not bad either.   It's like AMC with newer stuff.

And really, that is not a criticism.  If you look at in hours watched, Netflix Instant is a fantastic value.  I always find something when I'm too tired to read or compute or go to the gym.

 
briandnewby
briandnewby
9/30/2014 | 2:01:28 PM
Re: Netflix is fascinating
I think Netflix very much is like a channel.  It's basicall HBO without the front end of cable subscription.

HBO really is trying the same model--all shows on demand immediately after showing and then also having them on devices.  The library is more limited with HBO (at least HBO's choice is that the library is much more limited).
jabailo
jabailo
9/30/2014 | 2:32:16 PM
Re: Netflix is fascinating
Netflix's Recommended for You is sometimes uncannily good.   Yes, I would like to watch a few of these films and having done so, enjoy them.  Lots of times its more like the present your grandma buys you (but you always liked sweaters) which you promply exchange for something cooler.

Ideally, I would simply sit down and one of these channels would entertain me.  I would clap my hands, say "Begin!" and it would present video entertainment that would, make me want to watch.

That might involve some combination of AI like IBM's Watson, plus really great data mining from my Facebook interactions, plus voice commands so I can "surf" through options when it gets it totally wrong.

 
MikeP688
MikeP688
9/30/2014 | 4:01:43 PM
Re: Netflix is fascinating (Brief Thoughts)
I am hoping to get my act together to actually test Netflix on my new ROKU device this week!! :-)  As for it almost being a Channel, I suggest that it is due to the very nature of how it is spreaheading original programming, understanding and customizing as required.     Here is the issue w/some of the ondemand "stuff":   Every "on demand" is asking $ 7/$8 for some of the new releases?   It will be interesting as Verizon works on the transition to the service as noted, what next?  What is the cost?  How will it help with on-going traffic?

 

 
smkinoshita
smkinoshita
9/30/2014 | 5:29:38 PM
Re: Netflix is fascinating
"Lots of times its more like the present your grandma buys you (but you always liked sweaters) which you promply exchange for something cooler."

I find that happens a lot of times when computers try to make recommendations.  So far the only one that I've found quite good has been Amazon's.  Most others I've tried are pretty off most of the time.

I'd love to see Watson improve things.  Then maybe the marketing department could get a clue.
briandnewby
briandnewby
9/30/2014 | 6:24:58 PM
Re: Netflix is fascinating
Predictive analytics in entertainment IS pretty spot-on.  I did see Amazon slip recently and not flag a book I bought before as "you purchased...."  Not quite the same thing, but I've come to expect retailers to know me better than I know me.  Last night, in fact, QVC almost talked me into a line of wigs, nearly convincing me that they could be shaped quite manly.
briandnewby
briandnewby
9/30/2014 | 7:57:20 PM
Re: Netflix is fascinating (Brief Thoughts)
Isn't that the ultimate issue with cutting the cord, or cutting cable in favor of Netflix and other things? Sticking it to the cable company isn't really sticking it to them when they also provide the Internet service.
MikeP688
MikeP688
9/30/2014 | 10:21:15 PM
Re: Netflix is fascinating (Brief Thoughts)
The tragedy of the times we live in..that's why I am routing for Google Fiber. :-)
briandnewby
briandnewby
9/30/2014 | 10:36:43 PM
Re: Netflix is fascinating (Brief Thoughts)
Just signed up for Google Fiber in KC. We need about 130 more homes to be able to get it. The Internet is free, except you have to pay for the install (about $300). Or, we're signing up for a plan that is about $120 with faster Internet and cable, no install fee. Many thoughts, though--mostly, more power to the television networks for continuing to charge more per show for advertising while viewership has dropped dramatically.
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