Redbox Instant, the online-video service owned by Verizon Communications Inc. and Coinstar Inc., has signed 10,000 users to what it is calling a public test and says it sees the potential for 35 million customers, based on research.
The service, which combines streaming with Redbox kiosk discs, focuses on movies and intends to draw customers from competitors that don’t offer DVD rentals, Chief Executive Officer Shawn Strickland said.
“We’re not the Netflix killer,” Strickland said. “We’re focused on movies. DVDs are our core, that’s a core differentiator.”
Redbox Instant, at $8 to $9 a month, is counting on price and convenience to attract customers. Users will get unlimited streaming plus four DVDs a month from kiosks. The service also offers on-demand rentals and digital sales of newer titles. Redbox Instant has 4,200 movies in its streaming library and 2,500 available on video-on-demand.
Films from Lions Gate, Paramount Pictures, Warner Bros., Universal Pictures, Sony Pictures and Relativity Media will be available for purchase and on-demand rental.
Netflix had 27.5 million U.S. streaming and mail-order DVD subscribers as of Sept. 30. The company, based in Los Gatos, Calif., charges $7.99 a month for unlimited streaming and the same amount for DVDs sent by mail.
Coinstar’s Redbox unit operates about 42,000 kiosks.
Redbox Instant may add television shows if the company can offer programs that aren’t available elsewhere, Strickland said.
“Ultimately, the strategy for us in the content space has to be bringing people in, and TV is part of that,” Strickland said.
Redbox Instant’s business model differs from Netflix and other streaming services in that it compensates studios based on the number of subscribers instead of making a large upfront payment.