Market Insight

Redbox and Verizon end streaming service Redbox Instant

October 07, 2014  | Subscribers Only

Laura Aguilera Laura Aguilera Senior Research Analyst, Service Providers & Platforms

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Redbox Instant will cease operations 7 October 2014 – after just a year and a half since launching the subscription video streaming service in March 2013. The joint venture from Verizon and Redbox offered instant access to over four thousand movie titles as well as four Redbox rentals a month from its kiosks for $8 per month. The service also offered online movie purchases from its website and online rentals for an additional fee. 

The service was available on several connected devices, including Roku, Xbox One, Xbox 360, and PlayStation 3 and 4, among others.

Our analysis

While initially securing tens of thousands of customers in its beta test, the service wasn’t able to gain a greater level of traction among US consumers. Redbox Instant’s subscriber recruitment suffered a further setback in June 2014 when it suffered a security breach and was forced to disable new sign-ups. Additionally, existing customers’, with expiring or revoked credit cards, access to the service was also disabled due to an inability to add new payment information.  Similar hacks to other platforms have negatively impacted consumer confidence; for example Play Station Network’s (PSN) security breach in April 2011 which caused the network to close for 24 days and led PSN to rebrand as Sony Entertainment Network in 2012.

Aside from the four monthly kiosk rentals from Redbox, the service lacked a unique offering. The physical rental and video streaming hybrid model was also offered by Dish’s Blockbuster@home, which has since removed the physical component of the offer.  

In order to compete with SVoD services like Netflix, Hulu, and Vudu, Redbox Instant needed to secure rights to additional, attractive and appealing content. Netflix, the market leader, has an expansive catalogue of TV shows and movies and also features original content, a move Redbox was far from making. Beyond customers interested in the physical component, Redbox Instant lacked a truly unique selling point.

While this marks the end of the partnership between Verizon and Redbox, Verizon has maintained ambitions to provide an online video service with its recent acquisition of Intel’s online TV service, OnCue. Verizon has also announced programming rights from Viacom have been secured. 

 

Geography
USA
Organization
Redbox Verizon
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