After a disappointing quarter, Redbox confirmed Wednesday that its new digital movie service will indeed be similar to Netflix, a "...subscription-based Internet streaming instead of a transactional service through which consumers pay separately for each movie" that combines streaming with physical disc rentals through its kiosks.
As TDG has previously reported, Redbox had hinted at launching a subscription streaming service with a (still) unnamed partner. The Los Angeles Times notes that "several people familiar with the matter" believe Redbox's partner will be none other than Amazon (yep, the same Amazon that is widely rumored to be working on its own subscription streaming service).
Too bad Redbox did not confirm an Amazon partnership - it certainly would help soothe investor worries. After announcing its Q4 2010 results on Friday of last week, shares of Coinstar, Inc. (Redbox's parent company) declined 26%. Why? According to CEO Paul Davis, "This was Redbox's first holiday season with 28-day delayed titles, and we underestimated the impact that the delay would have on demand."
Coinstar is learning the hard way that disc rentals - even when value priced - are increasingly passé, attracting less and less demand as streaming video skyrockets. Streaming is where the future lies and the sooner Redbox is able to make this jump the better (with or without Amazon).
ShareThis