Today in Connected Consumer

Verizon and Redbox announced in a press release this morning that they are forming a joint venture to offer video streaming and downloads beginning later this year, in addition to Redbox’s DVD rental kiosk business. The press release is sketchy on details of the planned service, such as pricing, title availability and whether it will offer subscriptions. But an SEC filing on the joint venture refers to Verizon making available to the venture “certain rights to video programming content delivered via broadband networks,” which sounds like the TV rights currently owned by Verizon FiOS. Redbox will make available “Blu-ray Disc rental nights from Redbox kiosks,” an apparent reference to whatever direct distribution deals Redbox currently has with studios. The puzzling part to me is the ownership structure of the venture. Verizon will own 65 percent and control three of the five board seats, while Redbox will own 35 percent and two seats. Given that Redbox currently generates 84 percent of Coinstar’s revenue, it seems odd that Coinstar would give up control of its biggest business, unless it were entertaining serious doubts about the business’ long-term future.

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Paul Sweeting

Principal Concurrent Media Strategies

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