Redbox Instant by Verizon, the online video and kiosk DVD rental partnership announced by the two companies last year, appears to have finally gotten off the ground after a series of delays. Long anticipated as a competitor to Netflix, the venture allows customers to stream videos over landline or 4G broadband connections, in addition to renting 4 DVDs or games a month at Redbox kiosks. Subscriptions cost $8.00 per month. Blu-Ray rentals at kiosks are available for an extra dollar per month.
In what could be a key differentiator, Redbox Instant allows non-subscribers to rent or buy titles on an a la carte basis, although only selected titles can be viewed in this manner. Customers renting a title online can delay starting it for up to 30 days. Once started, the title can be viewed multiple times over the next 48 hours. Customers that purchase a title can view it at any time.
Streaming works on many devices like computers, most tablets and smartphones, some Samsung TVs and Blu-Ray players, and the Xbox360 gaming console. However, it does not yet appear to work with other consoles or devices such as Roku or Boxee. Also, the options for viewing titles are subject to considerable variations. Some content can only be rented at kiosks, some is not available in high definition, and some can be rented but not purchased. Even so, the joint venture claims to be working towards adding more titles, options and devices as quickly as possible. While the list of available titles is not as expansive as that offered by Netflix, the kiosk, a la carte, and purchase options may be very attractive to many consumers.
In a March 30 Wall Street Journal interview, Lowell McAdam, chairman and CEO of Verizon Communications, revealed the company’s intent to roll out a new mobile video service by year end. The plan is predicated on the FCC’s approval of the company’s spectrum purchase and partnership agreement with Comcast, Time Warner Cable and Bright House Networks and Cox Communications.
The mobile video service would be made available to existing mobile and cable customers and would include an a la carte content component.
Verizon and the cable companies have provided testimony at the FCC indicating that the partnership will not be anticompetitive. Analysts have compared the deal to the failed AT&T acquisition of T-Mobile, which could not acquire regulatory approval from either the FCC or the Department of Justice.
The a la carte programming plan is a wild card in this transaction. While it could add weight to the plan advanced by Verizon and the cable companies, it must also get buy-in from content owners. Without the content owners, the plan appears speculative.