Redbox‘s streaming service partnership with Verizon has been under wraps since it was announced a few months back, but finally some details have started to leak out. For $7.99 a month, users will gain access to Redbox’s complete library, Netflix style, as well as four free disc rentals a month that can be reserved through the company’s website. Interestingly enough, the Redbox licenses appear to be based on subscriber numbers, and not upfront payments.
While such a license agreement would make sense for transactional VOD, it would appear at odds with media company CEOs Les Moonves (CBS Corp.) and Jeff Bewkes (Time Warner), among others, who have publicly stipulated that SVOD platforms pay upfront for content, rather than build their services on the backs of third-party content.
Kraft said the license arrangement would have “significant implications” regarding initial content costs as well as profitability. He said the joint venture would have the opportunity to acquire significantly more content at a much lower initial cost.
By leveraging Verizon’s FIOS buying power, Redbox may be able to acquire more content more cheaply, and that will certainly give them a bit of a leg up when going head-to-head with Netflix. The big advantage? There’s a bunch of people who got pissed when Netflix ramped the cost of streaming and rental, and may jump ship if they can get their physical fix somewhere else for the price they want to pay.
Via: [Home Media Magazine]