Friday, July 22, 2016

Redbox Tries Streaming Again

When Redbox first partnered with Verizon three years ago, their joint venture, titled Redbox Instant, was seen as a possible competitor to Netflix and Hulu.  It was a strategy to expand from the DVD kiosk business toward a streaming one with a partner with a great deal of experience in mobile.  For whatever reason, that venture failed and Redbox Instant died last year. 

Since then, Verizon has been experimenting with their own subscription streaming mobile service. And now Redbox has decided to go it alone too with a new venture dubbed Redbox Digital.  But rather than be a monthly license fee subscription business, it appears that this new venture will attempt a transactional model.  According to Variety, "Redbox hasn’t said anything about pricing or catalog for Redbox Digital, but one can assume that it will largely mirror that of other services that allow users to pay to rent or own individual titles, including iTunes, Vudu and Google Play. That means that streaming rentals will likely be significantly more expensive than the $1.50 Redbox customers currently pay for physical disc rentals."

Why did the Verizon - Redbox Instant partnership fail?  What did each side learn as they independently create other digital streaming businesses?    And can either of these two succeed against the respective incumbents.  The opportunity is there as long as each can learn from their past mistakes. I'd love to help.

U-Verse Loses Subs While DirecTv Adds Them

AT&T may just consider itself a tale of two cities.  On one hand, they have the newly acquired DirecTv, a satellite service that saw a gain of 342,000 subs in the second quarter, while its competition, Dish, lost nearly as many.  And on the other hand you have the telco digital service, U-Verse, what FIOS is to Verizon, dropping those DirecTv gains and more. They lost "391,000 U-verse TV users in the second quarter" per Fierce Cable.  That's almost a 50,000 sub net loss for AT&T!  What happened?

AT&T also reported more broadband losses as they were not able to convert their DSL base to IP.  Did these customers go back to cable or did they ut the cord altogether?  The challenge AT&T faces is how to keep promoting and growing the DirecTv business without taking that business away from its telco side.  Is there synergy there to grow or a zero sum game?  The last quarter financials questions where the business is going.