Streaming Shutdown: Redbox, Verizon give up on Redbox Instant

Calling it quits after less than two years in operation, Redbox and Verizon are closing down the streaming subscription component of Redbox’s rental business. Likely attributed to a lack of subscribers as well as rumors of subscriber credit card information being used for fraudulent purchases, Redbox struggled significantly to pull market share away from competitors like Netflix, Amazon Instant Video and Hulu Plus. According to the timeline of the shutdown process, Redbox will allow subscribers to continue streaming up until 11:59 p.m. October 7 and will issue refunds to customers that recently renewed their subscription.

Admittedly, Redbox entered the crowded market of streaming video services at a late date during December 2012. While services like Netflix and Hulu Plus were already heavily investing money in creating original content, Redbox was attempting to compete against the existing catalog of content available on other services. Redbox originally launched with a small percentage of the same competing content, but included a number of physical rentals each month in the deal. Hypothetically, it was arguably a good deal for existing Redbox users that rented multiple discs per month, assuming those users were savvy to streaming video.

As Redbox and Verizon attempted to improve the library of streaming content on Redbox Instant over the last 18 months, competitors were gaining accolades from critics and subscribers for original programming. In addition, the credit card fraud issue caused Redbox to shut down the ability to subscribe to Redbox Instant (as a new subscriber) approximately three months ago. According to company insiders, the streaming service has been operating at a loss and wasn’t increasing subscribers at a rate that would have brought the service to a porfitable point in the near future.

It’s likely that Redbox Instant applications on various hardware platforms will be removed in the near future. The application has been available on the PS4 and Roku 3 since late 2013 as well as the Xbox One since early 2014. The application has also been available for Android and iOS users as well.


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