It seems as if Redbox Instant by Verizon -- the video service bankrolled by Coinstar (CSTR +0.00%) and Verizon (VZ +1.28%) -- isn't ready for prime time just yet.
The digital movie offering won't roll out of its invitation-based beta mode until March, the platform's head told VentureBeat and other journalists gathered for a CES breakfast yesterday.
Yes, this is the same service that was supposed to roll out last year. Before teaming up with Verizon, Coinstar's Redbox had been promising a digital strategy for two years with little to show for it.
As it stands, Redbox Instant doesn't seem very compelling. The digital smorgasbord consists of just 4,500 titles. There are another 3,000 more recent movies that can be streamed for a fee per digital rental, just as Amazon.com (AMZN 1.62%) enhances its larger unlimited library with thousands of pay-per-stream rentals. Matching Netflix (NFLX +0.14%) at $8 a month is brazen given the limited selection, though Redbox will be quick to point out that you get four Redbox credits a month for disc rentals at any of the more than 40,000 DVD-heaving kiosks around the country.
The rub here is that the appeal of physical rentals -- especially the round-trip process -- won't be popular for too much longer. Besides, these aren't four actual rentals unless the subscriber plans on returning the optical disc the next day every single time. We're really talking about four nights of a Redbox rental. On that basis, Netflix offers a substantially larger catalog of movies, an unmatched collection of TV shows, and 30 credits a month for twice what Redbox Instant will try to charge consumers.
Netflix and Amazon have little to worry about here, unless the largely forgotten Verizon part of the Redbox pair raises the stakes. If Verizon Wireless begins bundling this with its smartphones, including it free with tablet plans, or offering customers streaming off the data plan, this may make a difference. However, even in these cases it would be a matter of educating the market or widening the user base rather than gnawing on audiences that Amazon and Netflix have amassed.
For now, the only real mystery is whether this service will actually launch later this quarter. The alarm clock's ticking, but Coinstar has a habit of tapping the snooze bar to give itself a little more time.
