Media

Verizon/Redbox video service will be subscription-based, offer a “competitive” content library

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Top executives from Verizon and Redbox revealed more details about the new jointly-operated rental service announced earlier today.

The video rental service will allow people to access streaming video through Verizon, while also taking advantage of Redbox’s DVD and Blu-Ray rental Kiosks. The service will definitely operate under a subscription-based pricing model, but won’t give customers the option of choosing between a separate streaming or DVD/Blu-Ray subscription package, said Verizon SVP of consumer product management Eric Bruno in an interview with VentureBeat.

“We think we bring the most value to the marketplace when we bring both together. The physical and digital distribution are stronger together than apart,” Bruno said. This sets the service apart from Netflix, which does offer streaming-only and DVD-only subscription plans. “Our expectation is that when we get this offer (Verizon/Redbox service) in the marketplace, it’s going to be highly competitive and appeal to a broad range of consumers.”

But despite the subscription package details, both companies seem adamant about taking on Netflix (as well as other competitors) on all fronts.

The new unnamed service will offer a “broad array of content that will be very competitive in the market,” Bruno said while declining to elaborate on the details of its streaming content library. It should be fairly easy for a large organization like Verizon to offer the same kinds of streaming content libraries as Hulu Plus, Blockbuster, and Amazon Prime. But, the company will have to spent a lot more money on streaming licenses to truly compete with Netflix.

I also asked Bruno specifically about the possibility of doing exclusive original programing to compete against the growing number of streaming competitors like HBO Go, Max Go, Starz, and even Netflix. “Certainly nothing is off the table,” he replied.

For Redbox, the partnership with Verizon is less about spending money on licensing deals and more about offering its customers an additional option for watching videos.

“From our perspective, we think there are some unique assets between the two companies that make this a very exciting partnership,” Redbox SVP Galen Smith told VentureBeat.

Redbox is already the leader in physical media rental sales, with over 1.5 billion disc rentals and  more than 35,400 kiosks across the country. The company also recently thwarted an attempt by Warner Brothers to delay the availability of newly released WB DVD and Blu-Ray movies, which gives Redbox an advantage over Netflix. And with the Verizon digital distribution partnership, Redbox becomes even more competitive.

The new rental service is expected to launch across the country in the later half of 2012, according to Verizon and Redbox.