Redbox Digital Service to Challenge Netflix
Looks like Redbox is ready to play with the big boys. The LA Times reports that the kiosk DVD rental company is all set to challenge Netflix head-on.
Redbox President Mitch Lowe has said that his company is getting ready to offer their customers a digital option that will be subscription-based streaming instead of a transactional service. This means that with a single monthly fee, users will be able to access movies on multiple devices and access discs through kiosks.
It also means Redbox will be competing directly with Netflix, aka the media giant who has amassed more than 20 million subscribers to its DVD-by-mail and Internet streaming subscription plans.
Redbox has also previously stated it would launch a digital service with a partner, but has yet to identify who that partner would be. People familiar with the matter have apparently reported that Amazon.com is in talks with studios to acquire content for a subscription movie streaming service, making it sound more and more likely that it could be Redbox’s partner.
Investors have been eagerly waiting for Redbox to launch a digital service, knowing that consumers are increasingly choosing to watch movies via the Web and not DVD. Coinstar’s last fiscal quarter showed that Redbox revenue came in below expectations due to the impact of three studios not offering new releases to the company until 28 days after they went on sale. The company also recently took a hit when Walt Disney Studios decided to raise its wholesale prices for DVDs sold to the company.
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