* Redbox and Verizon join forces to offer new service
* Redbox Instant to start at $6, less than Netflix
* Customers able to stream to TVs, phones and tablets
(Adds details on lower-priced streaming-only service; Updates
By Lisa Richwine and Himank Sharma
Dec 12 Kiosk operator Redbox will launch an
instant video streaming service that starts at $6 a month,
providing another challenge to dominant movie rental company
Netflix Inc in the battle for home entertainment
The price for online movies from Redbox and Verizon
Communications Inc is lower than the $8 monthly fee
charged by Netflix for unlimited viewing from its larger online
library of films and TV shows.
"Redbox Instant by Verizon" will start selling subscriptions
through a limited beta test later this month, the companies said
in a statement on Wednesday.
Redbox Instant also will offer an $8-a-month plan with movie
streaming plus four one-night DVD rentals from Redbox kiosks, a
statement from the companies said. For $9 a month, customers can
rent high-definition Blu-ray discs in place of traditional DVDs.
Streaming and DVD-by-mail packages start at $16 on Netflix.
A Redbox spokeswoman confirmed the company also will offer
the $6 streaming-only plan.
The shares of Redbox parent Coinstar Inc gained 2.3 percent
to close at $51.96 on Nasdaq. Netflix jumped 5.4 percent to
$90.73 after a Morgan Stanley analyst raised his price target,
citing the company's strong portfolio of content after last
week's agreement for first-run Walt Disney Co movies.
Verizon shares rose 0.8 percent to $44.79 on the New York Stock
Coinstar and Verizon formed a joint venture in February to
sell video services in a market that is dominated by Netflix,
but also has several new entrants, including Amazon.com Inc's
Prime, Hulu Plus and HBO Go.
Redbox Instant subscribers will have access to movies from
Viacom Inc's Paramount Pictures, Lions Gate
Entertainment and MGM through a deal with the Epix
premium cable channel, as well as films from Time Warner Inc's
Warner Bros. That includes recent hits such as teen
death match drama, "The Hunger Games," and Tom Cruise action
sequel, "Mission Impossible: Ghost Protocol."
Customers will be able to stream the films to certain
Internet-connected TVs, phones and tablets.
While Redbox Instant will offer a smaller library than
Netflix, the new service contains enough content from major
Hollywood studios to make it an attractive alternative, said B.
Riley & Co analyst Eric Wold.
"They don't need everything Netflix has," said Wold, who has
a "buy" rating on Coinstar and a "sell" on Netflix. "I think
it's going to be a big draw for consumers."
But Morgan Stanley analyst Scott Devitt said Netflix's broad
range of content, enhanced by new Disney movies that will reach
the service in 2016, provided a key advantage for a company with
25 million U.S. streaming subscribers.
"It's about having the best and, right now, Netflix clearly
has the best content portfolio, domestically," said Devitt, who
raised his price target on Netflix shares to $105 from $80.
(Reporting by Lisa Richwine in Los Angeles and Himank Sharma in
Bangalore; Editing by Supriya Kurane, Bernadette Baum and Andre