Redbox and Verizon’s joint-venture video service is now in “alpha” testing, as the companies try to challenge Netflix for the streaming crown.
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Newly appointed CEO of Redbox Instant, Shawn Strickland, a Verizon executive, said the service will launch to the public later this year. However, while details on price and potential selection of films remain a mystery, there is still reason to believe the new service can be a true competitor to Netflix.
It will be difficult at first for Redbox Instant to challenge the library of movies and TV shows Netflix offers, but a clever package of plans could push the service off to a strong start. Strickland made it clear he believes there is equal opportunity for Redbox in both the physical and digital mediums, and while Netflix holds the upper hand in streaming, its by-mail DVD rental system is dated.
Redbox puts the newest movies less than a mile away from most customers, with kiosks at most supermarkets, 7-11 convenience marts and drug stores. When customers decide they want to see the latest movie, they can pick it up while running errands or take a quick ride to the nearest shopping center, which is a lot faster than waiting for Netflix to ship the latest movies to their door. This is an advantage Redbox can use to build their streaming service early on while the company’s executives take time to work out the kind of deals with content providers that Netflix already has in place.
All of Redbox Instant’s subscription plans could creatively be packaged to include a physical Redbox component. For example, if a customer pays $7 a month for unlimited streaming then that plan should also include a few free trips to local Redbox kiosks for the month. Customers may not be willing to pay monthly if all they’re getting is access to a streaming service that’s light on content, but they may pull the trigger if they’re getting it as an added bonus to their already frequent trips to Redbox.
Redbox may also cleverly continue to push its kiosk business as its main product while it builds up Redbox Instant, giving the streaming service time to grow until it reaches a near-level playing field with its competitors.
However, while Redbox Instant may eventually match much of what Netflix offers, it will likely be held back by the same problems that the current king of streaming is facing. Content providers are less willing to negotiate deals with streaming companies that will license their programming to be viewed an unlimited amount of times for a flat fee because it isn’t as profitable as DVD sales and cable rights deals. Redbox Instant can attempt to present itself to studios as the “good guy” alternative to Netflix, but it will be easier said than done considering the similarities the services will likely share.
Redbox Instant’s ability to truly differentiate itself from Netflix when it comes to streaming may come down to its ability to negotiate deals the competition cannot. Netflix has the streaming market heavily blanketed when it comes to TV series, and the streamer is even producing its own original shows. Redbox’s opportunity lies with films.
Netflix subscribers have expressed discontent with the movie selection on the service, and if Redbox can secure even a couple of deals its competitor can’t, it will begin to develop a reputation as the go-to service for movies.
Netflix is largely uncontested in the streaming business, but there is an appetite among its holdouts, and even many of its users, for a more complete movie service. Redbox kiosks are a good way for Instant to differentiate itself when it launches later this year, and if it can secure an exclusive deal or two it could be well on its way to disturbing Netflix CEO Reed Hastings’ sleep patterns.