Verizon-Redbox Streaming Video Service to Take on Netflix

Venture Arriving in Second Half Will Also Include Physical DVDs

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A RedBox DVD rental kiosk.
A RedBox DVD rental kiosk.

Verizon Communications and Coinstar, the owner of Redbox DVD kiosks, are partnering to enter the streaming-video fray.

After months of speculation, the two said Monday that they will introduce an online streaming-video service in the second-half of the year, competing directly with Netflix.

Verizon will own a 65% stake in the service and Redbox will hold the other 35%. But the two aren't saying much more about their joint venture. All that 's known is that the service will allow users to stream video content -- on the web and via mobile devices -- plus downloads and physical DVD rentals through rental kiosks. And Coinstar's SEC filing made an intriguing reference to "linear content" -- regular programming, as opposed to on-demand or time-shifted content. There's no word yet on pricing or the breadth of the content it will offer.

This comes shortly after Redbox said it will not accept Warner Bros.' new 56-day delay to receive DVDs, promising to purchase new Warner releases from a third-party provider to get them earlier.

Verizon started expressing interest in moving outside its core telephone, internet and Fios TV services late last year, while Redbox -- which offers DVD rentals for around $1 per night via kiosks -- had been talking about its desire to enter the streaming market for over a year.

Streaming video services' biggest obstacle is content costs, so one question is how much Verizon and Redbox will invest in their new services' offerings.

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