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Verizon (NYSE:VZ) and Redbox (NASDAQ:CSTR) have teamed up to launched a new streaming service in August intended to compete with over-the-top services like Netflix (NASDAQ:NFLX). But the new service is not meant to further the TV Everywhere goals of Verizon FiOS.
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Verizon Chief Financial Officer Fran Shammo announced Thursday morning at the 40th annual J.P Morgan (NYSE:JPM) Global Technology, Media and Telecom Conference that the new service would be going after some FiOS customers, but is primarily meant to target Redbox’s 30 million users in the U.S.
Shammo said Verizon’s new joint venture with Redbox is not so much to transition video content licensed for the fiber-optic-fueled FiOS’s roughly 4.4 million subscribers via TV Everywhere. Rather, the partnership is intended to expand Verizon’s capability outside FiOS’s footprint.
As of the end of the first quarter, Redbox has approximately 39 million customers. The company is also looking to take over the 10,000 Blockbuster (NASDAQ:DISH) Express kiosk locations it acquired in February. Redbox also has plans to expand into Canada — the third biggest disc-rental market in the world.
According to Shammo, Verizon is confident that they will be able to deliver content at a much cheaper rate than competitors. As for the streaming venture, Verizon will showcase Verizon’s new proprietary digital distribution platform –Verizon Digital Media Services — that will compete with the content delivery networks utilized by Netflix and Hulu — a joint venture between NBC Universal (NASDAQ:CMCSA), Fox Entertainment (NASDAQ:NWS), and Disney (NYSE:DIS).
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