RedBox and Verizon Make Their Partnership Official

"RedBox Instant by Verizon" will offer more or less the same features as Netflix

Netflix has been King of the Hill in the DVD and streaming video game but Redbox and Verizon are hoping to muscle their way in with a new partnership expected to be available later this year.

The service called "RedBox Instant by Verizon" will offer more or less the same features as Netflix will, without the home delivery option.

Consumers will be able to select DVDs at the Redbox' kiosks, stream movies directly to home television sets, and also choose to download them.

Customers will be able to choose between 36,800 Redbox kiosks across the U.S., and will also be able to subscribe to Verizon's subscription and video on-demand streaming services.

Industry experts believe the partnership could make a fairly large dent inNetflix' customer base.

Perhaps the two companies teaming up will not only provide an alternative for DVD and game consumers, but also fix some of the service problems that Redbox has created over the years, although if anyone has ever tried to straighten out a customer service problem with Verizon -- and who hasn't? -- it's not exactly an encouraging prospect.

Redbox rants

Redbox' kiosks are pretty straightforward but they still generate their share of grousing from movie-hungry consumers. 

"I rented 3 movies from Redbox and returned them within the allotted timeframe of a one-night rental. I have now been charged for all 3 movies totaling almost $80.000," said Cassandra of Minnesota."

"I contacted Redbox and after going back and forth with them for about a week, they decided they would be kind enough to refund half of the money they charged me. What?! I don't have these movies! I'm going to be calling them to offer one more chance to refund the remaining amount and then I will be heading to the bank to dispute that charge. I will never again be renting from a Redbox," she said.

Other consumers experienced problems with Redbox' DVD's being damaged or even blank.

"I want my money back," wrote Candice of Accokeek Md.

"Two weeks ago, I rented a game from a local Redbox, only to find out when I got home that there was a huge ring around the disc and it wouldn't play at all. I was charged 2 days on a game I couldn't play. Today, I made a reservation for another game at a Redbox, 10 miles out of the way. I got all the way to the Redbox, swiped my card, got 'what I thought was the game', and it’s nothing but a blank DVD-R disc with the barcode pasted around the ring."

Exactly how much Redbox' movies and games will now cost has yet to be announced.

Amazonian rumblings

Earlier this month Amazon said it will be working with Warner Bros. Domestic Television Distribution to offer new programming for its at-home video service.

Just like Netflix and Redbox, Amazon's Prime Instant Videos offers streaming services for those U.S. customers with a paid Amazon Prime or student membership. This of course is separate from the company's instant video division, that allows customers to rent and buy movies from a large selection.

However, Amazon only offers streaming capabilities, so customers aren't able to download. By partnering with Warner Bros., viewers will now have access to shows like "The Voice", "2 Broke Girls" and "The Bachelorette."

Netflix in the lead

With Netflix still being way ahead in the movie rental game, it will take both RedBox Instant by Verizon, and Amazon a long while to catch up. Especially since Netflix is doing everything in its power to strengthen its lead, at great cost to its bottom line. Its profits were off 91% for the second quarter and is forecasting a loss for the fourth quarter.

Just one year since the company's price fiasco, which drew away a large number of customers, Netflix recently announced that its customers watched over 1 billion hours of online video in June of 2012, which shows that while consumers may gripe, they are taking full advantage of Netflix' "all you can watch" pricing policy.

Netflix is in perhaps in that fabled location between a rock and a hard place. It is losing about 1 million DVD customers per quarter while its slow-growing online customers are consuming more and more streaming video. DVD rentals are about five times more profitable than streaming video.

All this and new competitors too? What's Netflix to do? Guess we'll have to wait and see.

Story provided by ConsumerAffairs.
Consumer Affairs

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