Verizon & Redbox Join Forces, But Will It Really Hurt Netflix?


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The digital streaming space is about to get more crowded as Verizon and Redbox prepare to launch their own service. Yesterday, Coinstar, Redbox's parent company, and Verizon announced they were partnering in a new venture. The companies are combining Verizon's video on-demand streaming and download service with Redbox's popular DVD kiosk service.

Does the venture from Redbox and Verizon sound like something you would want to purchase? We'd love to know.

Verizon and Redbox hope to give consumers an option that is a "simple and affordable way to access the video entertainment they crave."

Speaking about the partnership, Coinstar CEO Pau Davis said:

"Consumers rely on Redbox for the latest new release movies at a great value, and our joint venture with Verizon will enable us to bring them even more value by offering expanded content offerings and greater flexibility for how and when they enjoy entertainment."

"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," added Bob Mudge, Verizon's President of Consumer and Mass Business Markets.

Since the unnamed service is very similar to Netflix, a lot of people are wondering what will happen to it once this new venture launches. What's more, the past several months have been rather rough for Netflix after it dramatically raised its prices last September. Consumers were outraged and some even dropped the service, as Bryan Gonzalez, the Director of Social Entertainment Labs at the Entertainment Technology Center at USC, explained in this video:

Bryan Gonzalez, Director of Social Entertainment Labs at the Entertainment Technology Center at USC WebProNews recently caught up with Gonzalez again to talk about this latest development. According to him, Netflix has to continue to focus on its content in order to effectively compete with Verizon and Redbox's service.

"For Netflix to really continue competing, I think they're really gonna need to push hard and try to get as much content up front as possible," he said.

"As long as Netflix keeps that drum beat of fresh content - new content - to their streaming sector, I think they'll do fine," he added.

Should Netflix be worried? What do you think?

Gonzalez went on to raise an interesting point about the deal between Verizon and Redbox. As he explained, Netflix's actions last year were part of a bigger effort to move away from its DVD service. However, it seems that this new venture focuses on the DVD side, which he believes could be due to accessibility issues that so many Americans face.

"A lot of Americans still don't have very fast Internet connections, so streaming quality isn't as great necessarily for everyone as a DVD or a Blu Ray," Gonzalez pointed out.

Another potential issue he raised was in regards to Verizon's current FIOS cable TV service. At this point, Verizon's FIOS program is not national, but one can't help but wonder what will happen since the new venture seems to contradict it.

These details and others were not disclosed in the announcement but are expected to come as the launch date gets closer. The companies said the new service would be available during the second half of the year.