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Redbox versus Netflix

Tuesday, February 07, 2012 - 02:08

Feb. 7 - Redbox is joining forces with Verizon to go up against Netflix, joining rivals like Amazon and Hulu plus, in the battle to grab market share of the streaming video business. Bobbi Rebell reports.

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PLEASE NOTE: THIS EDIT CONTAINS 4:3 MATERIAL Like the dramatic battles in the new 3D version of "Star Wars Episode 1", an epic rivalry is developing on how viewers watch movies once they leave the theater. Redbox and Verizon teaming up to battle Netflix- in a joint venture that will combine Redbox's DVD rental kiosk business with an Internet video offering from Verizon- including mobile content. Paul Davis, CEO of Redbox parent company Coinstar is confident. SOUNDBITE: PAUL DAVIS, CEO, COINSTAR (ENGLISH) SAYING: "I know the space where we compete directly with Netflix. In the physical space we are winning there so we are confident that Redbox can also win in the digital space as well with the combination of Verizon and Redbox." REPORTER BRIDGE: BOBBI REBELL, REPORTER, REUTERS (ENGLISH) SAYING: Redbox has more than 35- thousand kiosks like this one in the US- standard disks are just $1.20 per night- Blu-ray $1.50- and consumers get them right on the spot. Redbox was mum on details, but sources tell Reuters the new service will start at around $6 per month for movie streaming and one DVD rental at a time from the Redbox kiosks. Market leader Netflix starts at $7.99 per month for just streaming- double that to get disks mailed to you one at a time. Wedbush Securities research analyst Michael Pachter: SOUNDBITE: MICHAEL PACHTER, RESEARCH ANALYST, WEDBUSH SECURITIES (ENGLISH) SAYING: "This is David vs Goliath and I don't see Redbox taking on Netflix directly but I think that Netflix ultimately dies the death of a thousand cuts. I think Redbox is going to nibble away at their toes with this partnership, I think Amazon will nibble. I think Hulu is going to nibble." The real winners according to Pachter will be the content owners: SOUNDBITE: MICHAEL PACHTER, RESEARCH ANALYST, WEDBUSH SECURITIES (ENGLISH) SAYING: "I think ultimately there is going to be so much competition that what is really going to bury Netflix is that there is going to be more bidding for content so price of content goes up. That will squeeze Netflix margins. They will be forced to raise price on this $8 plan." Redbox and Verizon promise more details when the service launches in the second half of the year- so stay tuned. Bobbi Rebell, Reuters.

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Redbox versus Netflix

Tuesday, February 07, 2012 - 02:08