Digital Streaming Services: The Future

Rental prices need to come down. I think that a maximum price of $2 is good. I think that whoever can deliver the best experience (on all devices, especially TV) at the best price will come-out on top. I think that VUDU, Blockbuster, and Redbox are the best positioned to dominate the digital rental market, though the company that ends-up coming out on top may not even be on the field yet, as it were. I think VUDU, Blockbuster, and RedBox can do well because of their existing imprint. VUDU is on the most connected TV devices, Blockbuster is well-known and trying to get back in the lead, and RedBox is known for low cost and convenience. But wait Kyle, Redbox doesn’t have a digital rental service; not yet they don’t but they will (more info below). The reason I don’t think Amazon will reign supreme is price. Their rentals are too high ($3 for an episode of CSI? Come on guys, be serious) and their streaming service is part of Amazon Prime ($80 a year is too much when Crackle is free and Netflix gives you a monthly option (yes, I know Netflix comes out to be more than Amazon Prime over time and Amazon Prime gives you more than just video streaming, but small monthly fees are easier to manage than a large annual one for most budgets)).  My main concern for Google Play Movies and YouTube is a marketing one.  At its core Google is an advertising company.  I hope that Google does well in this arena, I’m sure they’ll do “well enough” to keep the service around, but it will take some innovative and unique market positioning for them to really excel (PS – Google, I have some advice for you along those lines.  Call me.).  I don’t see iTunes being a bigger player than they already are, because Apple likes a closed ecosystem.  Redbox already has developer APIs for third-party apps to be able to get movie and game listings and reservations, this could easily be extended to digital rentals and subscription queues, giving them quite the edge over Netflix and others.

As for the subscription services Redbox may do well their too, since it looks like their proposed offering will be a mix of rental-only content and subscribed-access content (like Amazon Prime). But I think there is room and enough difference between Crackle, Netflix, and Hulu/Hulu Plus to all do well, as long as Hulu doesn’t (as rumored) start requiring a cable/satellite subscription to access their content (like TBS does currently for most of their content).

I noticed while re-reading this that I said “I think” a lot.  Sorry for the repetition, but at least you know I put some thought behind these words.

Redbox

My Description: I am excited. Let’s see how this develops.  A Google TV App would be a good thing for them to release (hint hint).

Price: UNKNOWN

Their Description: Verizon and Coinstar, Inc. today announced the formation of a joint venture that will create a new choice for quality- and value-conscious consumers seeking a simple and affordable way to access the video entertainment they crave. The venture’s services will offer all of the convenience, simplicity and value of Redbox® new release DVD and Blu-ray Disc® rentals combined with a new content-rich video on-demand streaming and download service from Verizon.
The joint venture plans to introduce the product portfolio in the second half of 2012. It will offer subscription services and more in an easy-to-use, flexible and affordable service that will allow all consumers across the U.S. to enjoy the new and popular entertainment they want, whenever they choose, using the media and devices they prefer. Additional brand and product information will be revealed in the coming months.
“When you consider the core elements the parties bring to this venture – our powerful brands; our national rental kiosk footprint; our anytime, anywhere network presence; and our mutual commitment to customer-focused innovation – it’s clear that Verizon and Redbox are a powerful entertainment team,” said Bob Mudge, president of Verizon consumer and mass business markets.
“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,” said Paul Davis, chief executive officer of Coinstar, Inc. “This alliance is the result of a deliberate and strategic process to identify a partner who shares our commitment to delivering innovative solutions to consumers. We look forward to rolling out the shared benefits this venture will bring to consumers, retailers, and shareholders.”
This venture between Verizon and Redbox will create the kind of national multi-platform product that customers are demanding from video entertainment service providers. It will leverage Verizon’s industry-wide relationships with entertainment content providers, its advanced cloud computing technologies and state-of-the-art IP network infrastructure to distribute video on-demand content to its customers.
“The joint venture will combine the accessibility and value of Redbox with Verizon’s vision for a borderless lifestyle – where consumers easily accomplish what they want or need to do, on their terms, through the power of the network,” said Mudge. “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.”
By offering instantly available online and mobile content with immediate access to physical media through rental kiosks, Verizon and Redbox will be uniquely positioned to deliver the best of both worlds – digital and physical – to consumers across the country.
The joint venture is a limited liability company with Verizon holding a 65 percent ownership share and Redbox holding a 35 percent ownership share at the outset.

One thought on “Digital Streaming Services: The Future

  • June 13, 2012 at 6:07 PM
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    Nice post. Packed full of good details. I am a big fan of redbox, even over blockbuster kiosk. I think streaming videos could be a great hit and profitable even at 99¢ each.
    Seriously, they would have to make a profit on volume. The ease, convenience and low would have to be killer selling power.

    Reply

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