Verizon & Redbox to launch new streaming service

Kiosk movie rental company Redbox and telecom Verizon are teaming up to launch a full-featured disc rental and streaming video service due later this year. While the new home entertainment platform lacks a name, its eventual chief rival is obvious. The two companies are gunning for Netflix.

The unnamed service will feature a subscription-based model, said the companies in a statement, hinting that there may be some sort of individual version as well. Flexibility is key, said Bob Mudge, president of Verizon consumer and mass business markets.

“The joint venture will combine the accessibility and value of Redbox with Verizon’s vision for a borderless lifestyle – where consumers easily accomplish what they want or need to do, on their terms, through the power of the network,” said Mudge. “Together, we are erasing old technology boundaries, freeing people to spontaneously enjoy the entertainment they want, whenever they choose, using the devices and media they prefer, at home or away.”

An insider told Reuters that the new company would bundle a one-disc-at-a-time Redbox rental with online streaming for just $6/month. Following a controversial September price hike, Netflix’s asking price for the same is $15.98/month. Even the company’s dedicated streaming and by-mail physical disc rental options each weigh in at $7.99/month.

Not only is the pair going for Netflix’s sizable jugular (more than 20 million customers, with the bulk living in North America), but it could also beat to market another competitor. Whatever they’re prepping won’t be limited, a la Blockbuster Movie Pass. The rental and streaming platform debuted last October exclusively for Dish TV subscribers.

Dish Network acquired Blockbuster’s foundering business in April 2011. The company has yet to bring the service to the mainstream.

Two factors, however, could stymie the service’s success out of the gate: gathering enough content to craft an attractive Netflix alternative, and a lack of original programming.

Though Netflix lost some of its most popular content last year, the Los Gatos company has invested in herding new and exclusive shows. Netflix debuted its first original series, “Lilyhammer,” this week. Several others, including David Fincher’s remake of British drama “House of Cards” and horror novel adaptation “Hemlock Grove,” were announced last year. The streaming company also nabbed the rights to a new season of the canned-before-its-time sitcom “Arrested Development” for 2013.

Expecting Verizon and Redbox’s new service to hit all the right notes on day one may be asking too much. But a competitive price could easily win over Netflix customers – much like the opposite helped drive them away last fall. (via Hacking Netflix)