Tags: redbox instant | shutting down

Redbox Instant Shutting Down: Streaming Service Lasted Less Than 2 Years

By    |   Tuesday, 07 Oct 2014 07:55 AM

Redbox Instant announced it will be shutting down this week after less than two years, as the company known for its video-rental kiosks failed to gain any traction with its streaming service that attempted to compete with Netflix, Hulu, and Amazon Prime.

The closure takes effect at midnight Tuesday.

Redbox Instant was only available to Verizon subscribers, which likely hurt it against its big fish rivals, The Wall Street Journal's Market Watch noted.

"In our view, Redbox Instant struggled to gain a foothold in the streaming market due to its relatively weak streaming offering," Michael Pachter, of Wedbush Securities, told Market Watch, adding that Redbox never tried to explain to customers why it was different from its competitors.

Pachter said Redbox Instant also suffered from the curse of timing — it tried to enter the market just as the other streaming businesses were becoming more innovative (Netflix with its original programming and Amazon Prime with its acquisition of the HBO catalog for "The Sopranos," for example).

"The joint venture partners made this decision after careful consideration," Redbox and Verizon said in a joint statement. "The service had not been as successful as either partner hoped it would be."

Meanwhile, Redbox video-rental kiosks will remain in operation. Scott Di Valerio, CEO of Redbox parent company Outerwall, said in the company's July quarterly earnings report that, while box office sales plummeted over the summer, other Redbox stats were up.

"June represented the lowest monthly theatrical box office in Redbox history," he said in the report, according to TechTimes.com. "Box office in June was down 83 percent from June 2013 as only four titles were released during the month. While the release schedule was not compelling for consumers during the quarter, consumer engagement with Redbox remained strong as demonstrated by a significant year-over-year increase in e-mail open rates, e-mail subscribers, and Redbox app downloads."

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Redbox Instant announced it will be shutting down this week after less than two years, as the company known for its video-rental kiosks failed to gain any traction with its streaming service that attempted to compete with Netflix, Hulu, and Amazon Prime.
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Tuesday, 07 Oct 2014 07:55 AM
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