Redbox Instant Is Shutting Down as Verizon Folds Netflix RivalNEW YORK (TheStreet) -- Verizon Communications and Outerwalls joint venture movie streaming service, Redbox Instant, is officially closing as of tomorrow, as Netflix strengthens its stranglehold over the streaming content business. Subscribers were notified of the shutdown by an email message sent over the weekend. Must Read: 17 New Hollywood Movies You Will Want to See Over the Holidays Thank you for being a part of Redbox Instant by Verizon. Please be aware that the service will be shut down on Tuesday, October 7, 2014, at 11:59 p.m. Pacific Time. Information on applicable refunds will be emailed to current customers and posted here on October 10. In the meantime, you may continue to stream movies and use your Redbox kiosk credits until Tuesday, October 7 at 11:59 p.m. Pacific Time. We apologize for any inconvenience and we thank you for the opportunity to entertain you. Verizon was gaining 0.72% to $50.07aandaOuterwall shares were off 0.52% to $57.30 in mid-morning trading in New York. Steven Frankel, analyst with Dougherty & Company thinks the venture was doomed from the start. In a phone conversation, Frankel said neither side wanted to invest in content. It turned out to be a vehicle for current Redbox customers to get discounts on their kiosk rentals. The $8 a month service was started last year combining the best of Redboxs DVD kiosk offerings with Verizons streaming movie business. It was designed to compete with the aforementioned Netflix, as well as Amazon and Hulu Plus but never really gained traction with consumers. Redbox couldnt match the competition when it came to the overall number of videos offered to its customers. Redbox plans to continue offering movie and video game rentals from its nationwide network of kiosks. Redbox Instant has had its share of problems in the past few months. Because of credit card fraud issues the service stopped accepting new sign-up earlier this year. And those problems also made it impossible for new or existing customers to add or change payment information on the site. According to recent statistics from Sandvine, Netflix commands one-third of all internet streaming traffic in North America. YouTube, which is owned by Google , is second with slightly more than 14%, with Amazon Video and Hulu registering less than 2% each. Redbox Instant didnt make it onto that list. Its of no consequence for Verizon, Gerard Hallaran of Janco Partners said in a phone interview. Verizon tries many things, learns from the experience and moves on. MoffettNathanson analyst Craig Moffett said that Verizon never really seemed that interested in the venture. Verizons commitment never seemed to be that strong, but I think it would be a mistake to read this as Verizon backing away from the web video market, Moffett said via email. It is just as likely that they simply decided they were riding the wrong horse. Theyve been talking up web video quite a bit lately, and their OnCue acquisition could be the basis for a more serious market entry in due course. Comcast recently came to a similar conclusion about its Xfinity Steampix streaming service. It decided it would no longer offer the service as a standalone product but would continue to feature its movie and TV shows only for cable subscribers. Verizon may not be giving up on all video streaming. Earlier this year, it bought a TV streaming unit from Intel Media and could be planning new services to bring video to smartphones, tablets and PCs. Must Read: 10 Best Apple Products Ever -- Written by Gary Krakow in New York. To submit a news tip, send an email to tips@thestreet. Click to view a price quote on VZ. Click to research the Telecommunications industry. By twocents@thestreet (Gary Krakow) NEW YORK (TheStreet) -- Verizon Communications and Outerwalls joint venture movie streaming service, Redbox Instant, is officially closing as of tomorrow, as Netflix strengthens its stranglehold over the streaming content business. Subscribers were notified of the shutdown by an email message sent over the weekend. Must Read: 17 New Hollywood Movies You Will Want to See Over the Holidays Thank you for being a part of Redbox Instant by Verizon. Please be aware that the service will be shut down on Tuesday, October 7, 2014, at 11:59 p.m. Pacific Time. Information on applicable refunds will be emailed to current customers and posted here on October 10. In the meantime, you may continue to stream movies and use your Redbox kiosk credits until Tuesday, October 7 at 11:59 p.m. Pacific Time. We apologize for any inconvenience and we thank you for the opportunity to entertain you. Verizon was gaining 0.72% to $50.07aandaOuterwall shares were off 0.52% to $57.30 in mid-morning trading in New York. Steven Frankel, analyst with Dougherty & Company thinks the venture was doomed from the start. In a phone conversation, Frankel said neither side wanted to invest in content. It turned out to be a vehicle for current Redbox customers to get discounts on their kiosk rentals. The $8 a month service was started last year combining the best of Redboxs DVD kiosk offerings with Verizons streaming movie business. It was designed to compete with the aforementioned Netflix, as well as Amazon and Hulu Plus but never really gained traction with consumers. Redbox couldnt match the competition when it came to the overall number of videos offered to its customers. Redbox plans to continue offering movie and video game rentals from its nationwide network of kiosks. Redbox Instant has had its share of problems in the past few months. Because of credit card fraud issues the service stopped accepting new sign-up earlier this year. And those problems also made it impossible for new or existing customers to add or change payment information on the site. According to recent statistics from Sandvine, Netflix commands one-third of all internet streaming traffic in North America. YouTube, which is owned by Google , is second with slightly more than 14%, with Amazon Video and Hulu registering less than 2% each. Redbox Instant didnt make it onto that list. Its of no consequence for Verizon, Gerard Hallaran of Janco Partners said in a phone interview. Verizon tries many things, learns from the experience and moves on. MoffettNathanson analyst Craig Moffett said that Verizon never really seemed that interested in the venture. Verizons commitment never seemed to be that strong, but I think it would be a mistake to read this as Verizon backing away from the web video market, Moffett said via email. It is just as likely that they simply decided they were riding the wrong horse. Theyve been talking up web video quite a bit lately, and their OnCue acquisition could be the basis for a more serious market entry in due course. Comcast recently came to a similar conclusion about its Xfinity Steampix streaming service. It decided it would no longer offer the service as a standalone product but would continue to feature its movie and TV shows only for cable subscribers. Verizon may not be giving up on all video streaming. Earlier this year, it bought a TV streaming unit from Intel Media and could be planning new services to bring video to smartphones, tablets and PCs. Must Read: 10 Best Apple Products Ever -- Written by Gary Krakow in New York. To submit a news tip, send an email to tips@thestreet. Click to view a price quote on VZ. Click to research the Telecommunications industry. ift.tt/1gB4pon
Posted on: Mon, 06 Oct 2014 15:45:15 +0000
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