Redbox Joins Instant Video Stream Race To Challenge Netflix

By Alexandra Burlacu | Dec 16, 2012 01:34 PM EST

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The long-awaited Redbox Instant video streaming service from Verizon and Coinstar is finally due to launch later this month, posing a direct challenge to Netflix.

The service will start a public beta test in December, offering one free month. After that, Redbox Instant will be available for an $8 monthly fee, the same price as Netflix. The service will launch with movies from Epix, Lionsgate, NBCUniversal, Paramount Pictures, Relativity, Sony Pictures, and Warner Bros.

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While at the same price as Netflix' streaming-only plan, Redbox Instant has an advantage over its competitor: a monthly subscription includes four credits for one-night DVD rentals from Redbox' 42,000 kiosks. Meanwhile, for $1 extra per month, Redbox Instant users will also be able to upgrade those credits to Blu-ray rentals. Moreover, a $6 per month option will also be available for unlimited streaming only, according to AllThingsD.

Redbox Instant has been in the works for nearly two years. Its parent company, Coinstar, announced back in February 2011 that it planned to team up with another company to launch a streaming service. One year later, Coinstar and Verizon announced they struck a deal.

While both companies stayed mum about the program details until recently, Coinstar's chief financial officer (CFO) told CNNMoney back in February that the joint venture would target new-release content. Verizon and Coinstar have now detailed that new-release goal, particularly when it comes to Epix content.

Epix is a company owned by Viacom, and holds the digital rights to many Paramount, MGM, and Lionsgate movies. Redbox' new-release focus means that Epix titles will be available on Redbox Instant 90 days after they are released in theaters. Moreover, this deal with Epix further spikes competition with Netflix.

Epix once had an exclusive deal with Netflix, but the exclusivity clause of that contract expired on Sept. 1, 2012, allowing Epix to team up with other services. Amazon wasted no time and signed a deal with Epix just three days later, on Sept. 4, enriching its Prime streaming service. Amazon may settle for the $8 monthly fee as well, just like Netflix and now Redbox Instant. The company started testing the $8 price point last month with some of its customers.

Redbox Instant will be available at launch through traditional Web browsers, Blu-ray players, smart TVs, as well as tablets and smartphones that run  on Apple's iOS or Google's Android platforms.

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