Redbox Instant will be shutting down at 11:59PM on October 7th. The Verizon owned streaming service was intended to compete with Netflix, but even after teaming up with Verizon struggled to either function well-enough to draw customers, or offer a unique enough base of content that customers would feel compelled to use the service.
The streaming movie space has become ultra-competitive with sites like Netflix, Amazon, and even new companies have entered the arena. And they have been doing a better job of capitalizing on individuals need for instant video, television, and movies.
The service operated at a loss throughout its entire history and never even started bringing in new subscribers after hackers had obtained the credit card information of users and were executing credit card fraud as a result.
Redbox Instant though was a hybrid rental company more than they were a dedicated online streaming service. The company had a smaller video market – and they worked to combine this with putting vouchers in the hands of customers to use at their famous, and well-functioning DVD rental kiosks – for DVD’s and Blu-rays.
Even though, plans started at just $6 per month, it still did not prove worthy enough to attract a significant enough number of subscribers to warrant continuing the operation. It was something that obviously Verizon and Outerwall – the parent company of Redbox – felt would be a worthy move for the bettering of the two companies overall.
While now this allows Verizon the time and resources to reevaluate their place in the streaming video marketplace again, it will simultaneously shore up Redbox’s product and allow the company to fully focus on what works best for them. The company urged that their DVD rental service, which so many are used to seeing the rental kiosks in the entry ways of major shopping centers and drug stores across the United States, will remain intact and continue operating the way they have consistently over the last several years.
In fact, a compelling argument could be made that this decision to cease Redbox Instant could have had more to do with Verizon’s interest in the service, and their desire to stop losing money on the service because for Outerwall, the service was not costing them as much money that the company was losing money overall.
It will be interesting to see where Verizon goes next in the streaming market, and where Redbox goes with their flagship rental program – or what new programs they try after October 7th passes, and their streaming service ceases.