The vision behind this joint venture is moving in the opposite direction of the plans Netflix introduced to separate its streaming and rent-by-mail DVD services. Instead, Version and Coinstar hope to tightly integrate Redbox kiosks with the streaming service.
Scott Di Valerio, interim president of Redbox and CFO of Coinstar explained that the DVD kiosks would be part of the new subscription but did not specify whether it would be an unlimited service, similar to the mail-in service Netflix currently provides.
“The core will involve both things, because Verizon could do streaming today on their own–they don’t need physical,” Di Valerio said. “But they see our unique set of assets and the physical discs that consumers want. So I think it’s safe to assume that the core product will include both.”
Coinstar’s Redbox already has 35,400 kiosks for movie rentals, and it will add another 9,000 as part of its acquisition of NCR’s entertainment business, also known as Blockbuster Express. The kiosks are located throughout the United States at grocery stores, gas stations, pharmacies, convenient stores, and fast food restaurants, offering vending-machine-style DVD rentals. Redbox has enjoyed business from 30 million customers, and those numbers increased after Netflix announced its price hikes.
The companies have not yet revealed the pricing for the subscription service but have promised that it will be competitive with other similar services. Regarding the name, Di Valerio says it will probably not be under the Verizon or Redbox brand but will rather spawn a child brand from the joining of the two (hopefully not Qwikster). Regarding content, it seems most of the new releases will stay in the kiosks while other “library content” will be available for streaming.
