US telco Verizon will be launching a consumer beta of its new online video service ‘Redbox Instant’ before the end of this year, according to a statement given to tech news site GigaOM.
The joint venture between Verizon and DVD rental service Coinstar was recently predicted by GigaOM to charge around US$ 6 per month for basic streaming access, with a higher-tier US$ 8 per month package giving users an additional four DVD rentals.
Verizon and Coinstar formed their joint venture back in February, owned 65% by Verizon and 35% by Coinstar/Redbox, with the intention of creating a multi-platform offering that leverages Verizon’s relationships with content owners, its cloud computing capabilities and IP network infrastructure, and Redbox’s nationwide network of nearly 40,000 kiosks.
The joint venture was reported by Bloomberg back in September to have an interesting licensing model, under which it will pay content providers based on the number of subscribers it has, as done by most cable operators, rather than a set payment, as done by Netflix.
Tricia Lynch, senior programming executive at Verizon, discussed at the OTTtv World Summit event in London last November just how vital the joint venture with Redbox will be to Verizon, following its discovery that Redbox “didn’t have the appetite” to spend enough money on content to go it alone.