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Redbox Instant Gears for Launch; Will Support UltraViolet This Summer

9 Jan, 2013 By: Chris Tribbey

Redbox Instant by Verizon CEO Shawn Strickland

LAS VEGAS — In regard to the status of Redbox Instant by Verizon, CEO Shawn Strickland repeated a baseball analogy often: “We’re in the bottom of the second inning.”

The fledgling streaming video service is in beta launch, with a backlog of consumers clamoring to get in, according to Redbox representatives, who showed off the service to the press at the International Consumer Electronics Show.

The service is expected to launch by April and will combine four DVD rentals at kiosks with unlimited streaming for $8 a month. The streaming segment includes content from Lionsgate, MGM, Paramount and Warner, while Redbox will also offer titles for rent or purchase from Lionsgate, Paramount, Relativity, Sony Pictures, Universal and Warner.

UltraViolet-enabled electronic sellthrough titles from Warner should be available this summer, Strickland said.

During the beta test so far, few playback issues have been encountered, Redbox representatives said, and 75% of all movie clicks are taking place on the first page. However, past the relatively new releases advertised on page one, very deep catalog titles make up most of the selection so far, something Redbox will remedy as the service grows, Strickland said.

The windows for the product are all over the place, with DVDs available as early as street date for some studios, all the way up to 90 days for Epix streaming content after it premieres in the traditional premium window.

“[DVD] is the freshest content,” Strickland said.

TV isn’t well represented in the service, and there’s a reason for that, Strickland said.

“We didn’t see that there was a lot of reason to build a compelling offering around TV that wasn’t already out there,” Strickland said. “Our focus now is to lift the gate and open it up to the public.”

Nearly 50% of Redbox DVD renters also subscribe to some other over-the-top video service, so Redbox wanted their service to be different, Strickland said.

The Redbox Instant by Verizon application will be available for Apple and Android devices, Samsung Blu-ray Disc players and HDTVs, LG players and HDTVs, and Google TV, with the hope of having the application available on more devices soon, Strickland said.

David Bishop, president of Sony Pictures Home Entertainment, said the service is different from Netflix, and offers the further promise of getting consumers to buy more than they rent.

“I think there’s room for something different,” Bishop said.

Riley & Co. analyst Eric Wold said Redbox Instant doesn’t need to displace Netflix as the subscription VOD leader to be disruptive to the segment or to be profitable.

“If the only negative ‘issues’ have been content availability and device support, we view that as a positive as we expect those will both be improved further ahead of and after the full launch later this quarter,” he wrote in a note to investors. Wold is guessing that Redbox isn’t showing all its cards when it comes to content availability.

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