Verizon to end Redbox Instant streaming service on Oct 7, tired of Netflix growth

It has been said that “all good things come to an end,” but even some good things that don’t turn out so well also end. Verizon’s Redbox Instant service is one of those good things.

This is the stance of American wireless carrier Verizon Wireless, who teamed up with Coinstar (later acquired by Outerwall, Inc.) to offer the Redbox Instant streaming service in 2012. After 2 years, both Verizon and Outerwall have decided to bring their joint venture to an end, citing demand decline as the reason. “The service is shutting down because it was not as successful as we hoped it would be,” both companies said in a statement.


Redbox Instant was established to compete with the likes of Netflix, an online movie and CD disk streaming service that has taken the US by storm. Verizon charged its Redbox Instant users between $8 and $9 a month in hopes that it would put an end to Netflix’s continued growth, but it seems that it had limited success. Verizon reported in Q2 that it saw 169.3 million rentals, a 9.3% decline over the same quarter in 2013. To add to the disappointing figures, Redbox Instant had few new releases available for customers, leading many to look elsewhere.

Verizon Wireless is one of the top, national US carriers in terms of its coverage, rivaling AT&T in that regard, but Sprint is now slashing jobs and T-Mobile, though having an effective UNcarrier campaign in some respects, still lacks the coverage of AT&T and Verizon. AT&T and Verizon, staunch rivals, tend to follow each other in terms of price cuts – with AT&T slashing prices before Verizon follows suit.

While the Redbox Instant failure is something that doesn’t speak well of Verizon, what it goes to show is that Verizon’s already excelled in the areas it needs to. The carrier’s wireless coverage is second to none in the US, and the company has a very loyal customer base that always reminds AT&T customers of its surpassing national coverage.

What Verizon needs to do at this point is continue to work towards lowering prices for its customer base, particularly mid-tier customers. Verizon recently dropped the 4G LTE data throttling proposition for its grandfathered unlimited data customers, and the company’s “More Everything” campaign (which transformed the “Share Everything” company plans) provided lowered prices for 2GB data customers while creating a 3GB data tier for customers who don’t want to choose between 2GB of data (formerly $60) or pay $70 a month for 4GB of LTE data. Recently, Verizon also provided some $10 a month discounts for high-paying customers (those who pay for 20GB of data or more a month).

What Verizon still needs to do is lower prices for mid-tier customers who consume anywhere between 4GB and 10GB a month. Verizon doesn’t need a Redbox Instant service, nor does it need any other side service for which it can charge a few dollars a month.

What Verizon must do is meet the needs of its customers who are paying more a month for their phone service than they should. And when the company lowers its monthly plan prices, it needs to do so apart from whatever T-Mobile and AT&T are doing. Verizon customers who already struggle to pay their $200 a month phone bill see little need to hurt themselves further by adding an additional $8 or $9 Redbox Instant monthly plan to it.