Netflix (NASDAQ:NFLX) has been able to swat away competitors with surprising ease.

Forget the stock chart. We know that investors don't like the leading video service outside of its recent gains as a potential acquisition target.

However, customers -- and that's what ultimately matters -- still can't get enough of Netflix. It's not just that the company is now serving up more than a billion hours of streams to its more than 30 million worldwide streaming accounts. The key reason to buy into Netflix now, while it's still in the double digits, is that no one else is even close.

Worrywarts love to bring up (NASDAQ:AMZN) and the competitively priced collection of digital movies and shows that it makes available to Amazon Prime customers at no additional charge, but even the e-tailer's growing catalog of content is no match for Netflix. A third-party study recently showed that Netflix streams are generating nearly 20 times the traffic during peak prime-time viewing hours than Amazon's platform.

However, we can never forget the red 800-pound kiosk operator in the room.

Thinking outside of the Redbox
's (NASDAQ:OUTR) Redbox has been a thorn in the side of Hollywood for years. Studios have complained that its cheap DVD rentals have killed the retail market. At the very least, Redbox's popularity has put many traditional video stores out of business.

Netflix and Coinstar used to be the one-two punch of cheap optical disc rentals, but it's largely Redbox's show now.

Netflix has seen its base of DVD renters shrink from 13.9 million to 8.6 million over the last year. Really. The company has essentially turned its back on promoting its original business model that involved mailing out movies in its signature red mailers. Streaming is the future at Netflix, and it's clearly where the growth is.

Redbox, on the other hand, has taken advantage of Netflix's silent surrender and the more vocal retreat of DISH Network's (NASDAQ: DISH) Blockbuster to grow its business. Revenue at Redbox has climbed 18% over the past year.

Now it's time for Redbox to begin flexing its digital pecs.

Can you stream me now?
Redbox has been teasing investors about rolling out its own digital service for two years. It was originally believed that the company would team up with, but the leading online retailer decided to remain a solo act.

There was finally an announcement earlier this year. Coinstar would be teaming up with Verizon (NYSE:VZ) to roll out a platform called Redbox Instant by Verizon. The service was slated to launch during the second half of this year, but we've seen Coinstar snooze past self-imposed deadlines.

However, now that we're heading into the final month of 2012, it seems as if Verizon and Redbox may be ready to meet the 2012 launch.

The Android Community website claims that it stumbled on a Help page at that has since been taken down. The page offered up a Dec. 17 launch date and some interesting pricing information.

  • The digital service will cost just $6 a month. That is $2 cheaper than Netflix.
  • A second pricing tier -- essentially matching Netflix at $8 -- also offers four credits to rent DVDs from Redbox kiosks. That's a meaty $4.80 value for just $2 more, but it's important to note that unusued credits will expire at the end of every month.
  • Redbox Instant by Verizon will also offer video-on-demand rentals starting at $0.99.

It's not enough
Now, we know that pricing alone isn't going to take down Netflix. Amazon's service is cheaper, and that's before we consider the included monthly Kindle e-book rentals and free two-day shipping benefits of the service.

Offering physical rentals as part of a broader service is a nice touch, but if that was Netflix's kryptonite, Blockbuster would've been able to kill it a long time ago.

The on-demand rentals are interesting -- and it's also something that Netflix has inexplicably failed to do -- but will that be enough? No. Amazon's already doing this.

In other words, if this is the extent of the service, Redbox Instant by Verizon will be dead before it even starts. Oh, and that's before we even begin to consider how the digital library that the offering may launch with is probably going to be a shell of what Netflix and Amazon are currently offering.

The only reason not to dismiss Redbox Instant right away has nothing to do with Coinstar. Verizon is the one that needs to be respected here. It is the country's largest provider of wireless service. It's likely to promote this service to its smartphone owners, reaching an audience that Netflix and Amazon may not necessarily have access to in their own promotional initiatives.

Verizon also isn't a cheap wireless service, so we're talking about folks with ample discretionary income and a crowd where $6 more on a monthly Verizon bill may be a mere rounding error.

We'll know more soon, it seems. For now, Netflix has little to worry about.

Stream on
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.