Nagoya Corp – Redbox And Verizon To Cooperate.
In a marketplace that analysts at Nagoya Corp believe will become more fractured, with studios limiting the exposure their titles get online, Redbox and Verizon are joining forces to gain the most from both physical and online delivery systems.
The as yet unnamed digital streaming service is set to be launched before the end of the year and Nagoya Corp understands that Verizon will be the majority owner. This will make Verizon the first cable or telecoms company in the US to stream videos to customers that are not exiting subscribers.
In a supporting move, Redbox will acquire the Blockbuster branded retail kiosks for $100 million, bringing the 9,000 kiosks it operates into their existing network of over 35,000 machines nationwide.
The companies have yet to formulate a pricing structure for their service, however they did state that there would be a single monthly subscription that would enable both streaming and physical rentals. They believe that offering a mix of the two services will give them the added value to compete against the dominant Netflix in the streaming video sector.
While DVD sales have been in decline for the last few years, Nagoya Corp has noted that the cost cutting provided by kiosks has shown that consumer demand for renting digital video discs is still high, thanks in part to rental costs as low as $1.20 per night.
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