LOS ANGELES – Redbox Instant by Verizon, the digital movie venture preparing to start service, gained rights to stream films from Paramount Pictures, Lions Gate and Metro-Goldwyn-Mayer, a step toward competing with Netflix.
Owned by Coinstar and Verizon Communications, Redbox Instant will stream newer films such as The Hunger Games and offer four DVD rentals from Redbox dispensers for $8 or $9 a month. Streaming only is $6 a month, Chief Executive Officer Shawn Strickland said in an interview.
The service, 65 percent owned by Verizon, is banking on price and convenience to gain a foothold in the budding online video market. In addition to offering subscription streaming and DVDs for half the price of Netflix, Redbox Instant will sell and rent new releases from most major studios. Strickland is targeting Redbox customers who watch 58 million DVDs a month and isnt trying to match the TV library of its larger rival.
We really think we have a unique value proposition, Strickland said. We are very focused on the movie-lover segment. Were not trying to be all content to everybody.
Redbox Instant is being tested by about 2,000 employees of New York-based Verizon, the second-largest U.S. phone company. It will expand to as many as 100,000 customers in a limited public test before year end, Strickland said.
A full commercial rollout is anticipated for the first quarter of 2013, he said.
The Redbox Intant streaming accord is with Epix, the premium pay-TV channel owned by Viacoms Paramount studio, Lions Gate Entertainment and MGM Holdings.
Redbox Instant will pay Epix based on the number of subscribers, Strickland said. The service will have new Epix releases on the same basis as Netflix, or 90 days after they premiere on the pay-TV channel, along with catalog titles.
In all, the service will offer about 5,500 older titles for streaming, including from Time Warner Inc.s Warner Bros.