Redbox Streams, "Thanks Verizon"

http://www.usatoday.com/tech/news/story/2012-02-06/verizon-redbox-coinstar-streaming-video/52986864/1

This is such an interesting partnership. When Blockbuster and Hollywood Videos started charging rediculous amounts of money to rent a move for 3-5 days when you really only wanted it that night, who was there to fill the void? Redbox. When you had a late night craving for McDonalds and a chickflick, who was there to hold the tissue box? Redbox. When Netflix decided to separate their streaming and dvd businesses and charge a different price for each, who was there to cushion your fall? Redbox.

And now, when you want to watch the latest rental release but 7/11 on the corner is just 8 too many steps away, who is there to bring the movie to you? That right, Redbox.

From the people that brought you the machine that counts your change for a small fee (Coinstar) comes a partnership that will have us all reveling in digital media fantasy. Verizon is using its cable network and partnering with the digital media licensing of Redbox to bring streaming one night rentals to you. This product offering solves a number of pain points. Let me elaborate.

1) Netflix charges $8 to stream movies and tv shows directly to your favorite devices. This means that in a month if you watch one movie per week (just over the average family in america), you are paying $2 per movie. Redbox, on the other had, would allow you better media selection at a cheaper price $1.27 per movie.

2) What's the problem with Redbox today? You rent a movie for Saturday night, and when you get back from your busy Sunday you realize you forgot to return it. You've now paid for 2 days. Streaming digitally would allow users to control the return dates for their favorite films.

3) Selection. Everyone knows that Redbox offers much better selection than Netflix. This is why as Netflix users we also rent a Redbox at least once a month.

These are the obvious reasons to believe that this partnership is a good strategy for both companies. But lets take another look at the offerings of the major players in the industry.

If we analyse the major players in this industry by this Strategy Canvas (Value Curve) we can see where Redbox can plan to beat the other major players. The 4 most important are recency (current movie selection), relevancy (best movie selection), price, and possibly the most undervalued attribute in this value curve, commercials.

So as this deal moves forward, lets hope that Verizon and Coinstar (Redbox for all we care) are taking a good look at this value curve to understand their niche and strengths competing against the giants in this space.