Is a New Redbox Streaming Service in the Works?

Redbox, the movie and game-rental kiosk service, might be getting back into the streaming game a few years after its digital streaming service, Redbox Instant, failed. The new Redbox streaming service could be a pay-per-view option for rentals and purchases like Apple iTunes or Vudu.

The trade publication Variety—which broke the story, citing "multiple sources" familiar with the company—said that the new service will be called Redbox Digital and that Redbox is close to launching a beta of the service.

Redbox, however, isn't confirming the news. When contacted about a possible launch of such a service, a company spokesperson said in an email: “Redbox continually looks for ways to enhance our customer experience. For tens of millions of consumers, Redbox is their source for new release rentals without a subscription. As such, we regularly conduct tests of potential new offerings, that may or may not be brought to market, as part of our ongoing commitment to provide additional value.”

The Redbox Instant service, which we reviewed in 2013, was a joint venture with Verizon. We reported that one of the strengths of the Redbox streaming service was the wide number of options it provided. You were able to mix unlimited streaming with four disc rentals each month for either $8 (DVD) or $9 (Blu-ray) a month. Game rentals, which are available in kiosks, weren't part of the plan. Redbox and Verizon pulled the plug on the hybrid service after just 18 months.

Potential Benefits

A pay-per-view service, however, is a much different business from a subscription plan, and it appears to be one better suited to both Redbox's core disc-rental business and to its customers. For Redbox, negotiating the rights to pay-per-view titles should be easier than putting the necessary contracts in place for a subscription service. And many Redbox streaming customers already use the company's website to search for and reserve titles. For these users, it would be much more convenient to immediately order a digital version.

The one big question for consumers is whether Redbox would be able price its streaming selections any lower than its competitors do. One advantage to Redbox kiosks is the price of the rentals: $1.50 for DVDs, and $2 for Blu-ray discs. If there's no savings for users, there would be little reason to choose Redbox over a more established pay-per-view service, such as Amazon Instant, M-Go/FandangoNow, and Vudu, unless perhaps digital rentals are tied to Redbox's customer-loyalty program that lets users earn points toward future rentals.

Potential customers will also want to see how widely Redbox Digital is supported by streaming devices, given its late entry into the market. Being able to access content on a variety of devices beyond computers is a critical feature for many users.

This rumor comes as Redbox's parent company, Outerwall, is reportedly exploring a possible sale of the company. We'll have to wait and see if Redbox Digital actually launches, and if so, whether it's a sustained attempt to compete in the pay-per-view video market or simply an effort to boost the company's value to a potential buyer.