Will Redbox Rob Netflix?
Information on a Netflix (NASDAQ:NFLX) challenger came out not long ago in the form of an expanded Redbox platform, and already the new streaming and DVD delivery system is in beta, with a trial version available in Google’s (NASDAQ:GOOG) and Apple’s (NASDAQ:AAPL) app stores.
A Coinstar (NASDAQ:CSTR) subsidiary, Redbox will be offering a smaller selection of videos than Netflix and has a limited pool of producers to select from, but it will be focusing on more popular, mainstream films. Redbox will have less than a tenth of the selection in the Netflix library, but it intends to make its service available on a vast array of devices, including Google TV, some Samsung (SSNLF) TVs, and some Blu-ray players. Redbox will also feature a lower subscription price than Netflix.
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Redbox is investing in an extensive new platform for distributing films in a move to steal at least some Netflix’s customer base and expand its own. The implementation may be pricey, but with a lower price tag for customers, Redbox may be able to snag the casual movie watchers who don’t need access to some 50,000 films and series choices, of which many are notoriously obscure.
As Netflix has already proven, at-home streaming is a popular system. Redbox Instant is unlikely to be a flop — other Netflix competitors like Amazon (NASDAQ:AMZN) and Hulu Plus (NASDAQ:CMCSA) have managed to make a decent showing, despite playing second fiddle to Netflix. Coinstar shares — which have been steadily rising out of mid-November — could see a boost as Redbox Instant gains momentum. Conversely, Netflix could see a drop in revenue, and consequently, share prices. Netflix may need to get tactical, as it could lose customers, while Redbox’s customer base can only go up from here.
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