Hot idea quite similar to the famous vending-machine type of movies on rent has been conceived by Redox making them ready for entry into global online video streaming service by the proposed tie-up with Verizon the corporate entity already engaged in telecommunications. The two companies have made their plans for pairing up as an attempt of entry in this market.
The service is planned to be launched during the latter half of the current year, the deal shall be ensuring availability of the movies through joint platform available on Verizon?s site. There are possibilities that the service branding shall be of Redbox to be presented as mobile format
Here is great likelihood that price shall start at $6 for one month to be paid by the consumer for accessing this combined service shall be of the order of streaming option hosted by Verizon besides the Redbox offer of taking one DVD at a time on rent.
Competitively the consumers shall find the service cheaper in comparison to NetFlix, which is offering its cheapest offer at $7.99 for its streaming service or availing by mail rental service of one DVD at a time, their combination deal starts at $15.98.
Verizon shall be experiencing for the first time the video streaming service, besides the FiOS TV?s offer of complementing its TV networks. Bob Mudge Heading FiOS, expressed the keenness on commencement of this new kind of project as mentioned in his statement ?We are in the process of negotiation presently for finalization. There are high hopes regarding success in achieving broad choice of digital content for distribution.?
The experts keeping a watch on the industry moves have estimated that the setting up of the service shall be requiring initial funds to the tune of $26 million besides the committed contribution of $14 million from Coinstar, the ownership of which is held by Redbox thus making the total funds $40 million.
The Verizon?s funds for start-up generation is based on the confirmed assumption that Telecommunication Company shall have the 65% ownership of the business in its favor and the business operation shall be run by 5 very strong board of directors and the ratio shall be rounded off in the ratio proportion of 3:2.
Steve Clement the Analyst representing Pacific Crest expressed skepticism in respect of anticipated potential the joint venture basing his reason in his under mentioned comments.
Steve Clement, an analyst at Pacific Crest, was skeptical of the joint-venture?s potential, saying: ?We don?t know what kind of content they?ll have available, what they?ll pay for that content and what they?ll charge for it. There?s way more questions than answers at this point.?
Apparently there is uniqueness in the two companies having different kind of operations, it is to be seen as to whether the Verizon-Redbox association in the project shall be in a position create strong enough influence to affect American Online Streaming service market.
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