Big Red and Redbox unite for OTT streaming service

Michelle Clancy ©RapidTVNews | 07-02-2012

Verizon has finally made its move into the streaming arena with the announcement of a new partnership with rental kiosk brand Redbox, which will result in the launch of an OTT service.
RTVN previously reported on the rumours surrounding Verizon's tie-up with the Redbox, whose red kiosks have become expected fixtures in malls, grocery stores and a range of retail locations.Now, the chatter has been borne out in action. The joint venture deal, for which Big Red will own 65%, brings Verizon a wealth of new-release movie options to integrate into a streaming service, which will be a big help in moving into this new arena and compete head on with OTT giant Netflix in particular.
It's the same benefit that DISH Network is tapping via its Blockbuster acquisition: by having content partnerships and relationships already in place via rental partners, pay-TV operators can eliminate much of the complexity (and, presumably, the cost) involved in populating an online service.
"When you consider the core elements the parties bring to this venture - our powerful brands; our national rental kiosk footprint; our anytime, anywhere network presence; and our mutual commitment to customer-focused innovation - it's clear that Verizon and Redbox are a powerful entertainment team," said Bob Mudge, president of Verizon consumer and mass business markets, in a statement.
While few actual details have been made available for the service, the press materials do offer some clues.
The offering will be "new single-source, national multi-platform" service to be launched in the second half of the year, which will target "quality- and value-conscious consumers seeking a simple and affordable way to access the video entertainment they crave." To that end, the service will offer "subscription services and more," suggesting the possibility of a per-use pricing option. Also, the content will be instantly available online and via mobile, with immediate access to physical media through rental kiosks.
Verizon CEO Lowell McAdam has maintained that online video should and will be part of the company's strategy going forward. Reuters recently published a report saying that the consumer streaming service will be offered in markets outside the FiOS footprint. Meanwhile, TechCrunch cites unnamed sources in reporting that the service will launch in May with a scheme to charge a monthly fee for a bucket of credits that can then be used for game and video rentals.
The service is being touted as a Netflix competitor, but that company's CEO, Reed Hastings, practically shrugged off the development at a UBS conference. "The competitor we fear the most is HBO Go," Hastings said.