redbox
A bold move to directly compete with Netflix, Verizon and Rebox announced their plans to  allowing anyone with broadband service to rent DVDs and stream movies via the Internet. “It’s the best of both the physical and the digital, “Paul Davis said in an interview.  Mr. Davis is the chief executive of Coinstar Inc, the company that operates Redbox.

Redbox has a total of 35,400 kiosks located in convenience stores, McDonalds, grocery stores and drugstores nationwide.  Verizon has more than 100 million wireless users and nine million broadband subscribers.

One issue that Redbox has faced up to this point is to have the stature to negotiate with Hollywood studios.  At one point in it’s growth many in the industry saw them as an outsider and tried to ban their movies from the kiosks.  The partnership with Verizon could give the company the financial backing and scale now to make the Hollywood giants come to the table in deals.

Verizon will hold a 65 percent stake in the venture with Coinstar owning 35 percent.  Subscription services are expected to be half of what Netflix is charging for their DVD-by- mail service and streaming service.  The expectation is to launch the service in the second half of 2012.