DVD rental company Redbox has started to test a new movie streaming and download service with some of its customers, according to Variety.
Known for its DVD rental kiosks, Redbox has dubbed its latest online service "Redbox Digital", which comes two years after the company shut down Redbox Instant, the ill-fated joint venture with Verizon that officially launched in early 2013.
The subscription-based service was patently unable to compete with the likes of Netflix, and Redbox has reportedly learned from the experience: it's staying away from subscriptions in order to concentrate on transactional video on demand, according to sources familiar with the company's plans.
An app for the service similar in appearance to Netflix showed up on the App Store last week, allowing trial users to stream or download content from the company's digital catalog. A company spokesmen contacted Variety via email to confirm the news:
We are testing a potential new transactional digital VOD and EST offering, with a small subset of our customers, designed to complement our core kiosk rental business. As we test and learn from our customers, we will make evaluations that determine any future course of action.
The Redbox Digital catalog is said to be dependent on the company's deals with movie studios, meaning some movies could be available at kiosks when they're not available for streaming. However, the digital catalog will have a much larger offering than kiosks, which usually only hold a few hundred titles.
No word was given on pricing, but typical one-off streaming costs are likely work out more expensive than the $1.50 Redbox customers currently pay for physical disc rentals.
Top Rated Comments
Convenience should have nothing to do with it. Digital is all about convenience, it's inherent. By your logic, everything digital should cost more. That's not the future I was promised. Otherwise we'd just be adding layers of luxury, not actually improving anything.
Page 8 of this document: https://www.sec.gov/Archives/edgar/data/941604/000119312513173688/d524783dex992.htm
This was just a filing that was referenced on the Wikipedia page (I'm actually a bit surprised I found this, since Redbox is wholly owned by another company - I didn't think that other company would be required to disclose these numbers.)
So though they advertise prices as low as $1-2, they're counting on the fact that, on average, someone will have the disk for say, 2.5 days, so actually, on average they're making $2.50-$5 per rental.
I wonder if they could have the same kind of model with a streaming service, where you have to explicitly press a "return" button somewhere on the website, and they don't offer any reminders that that button has to be pressed after the movie is watched.
It'd seem sleazy and apparent that the're counting on users forgetting to hit that button, but they've always been counting on users forgetting to return the disk, so this is no different morally... it's just a bit more transparent that that's how they subsidize the service for people who actually remember.