Coinstar CEO Hints At Anti-Netflix Content Strategy For Redbox-Verizon Streaming Service

"I saw what Netflix was doing and thought, 'They could hit some speed bumps because they're paying big, big dollars for content and hoping the subscribers will come,'" recalls Paul Davis.

Davis is the CEO of Coinstar, the self-service retail giant that's the parent company of Redbox, the kiosk-based DVD-rental business. Redbox, which accounts for most of Coinstar's revenues, recently partnered with Verizon to launch a subscription streaming service in response to growing digital competition from Netflix, Amazon, Hulu, and HBO. Few details about the soon-to-be-unveiled service, called Redbox Instant by Verizon, have been revealed, but as reports continue to pile up indicating that Redbox's physical-disc business has peaked and that Coinstar might even be exploring a potential sale of its most successful subsidiary, there's been ramped up interest from shareholders and media outlets about what the company has planned for its streaming offering in order to prove the brand's viability.

In an interview with Fast Company last week, Davis offered more insight into Redbox Instant, hinting that it may take a different approach to acquiring digital content than what we've already seen from Netflix and its other competitors. "Just to be real candid, we couldn't afford to do [what Netflix has done] on our own, so we would've had to have a curated approach, with a much smaller offering," Davis says. "But then we wondered, 'Are there advantages to partnering with someone who is already in the space?'"

Enter Verizon, the company that Davis believes will not only bolster Redbox's brand but give the company access to a huge network of customers. But when asked what most excites him about the partnership, Davis answers, "[Verizon's] access to digital content."

Content, it's clear, is the biggest differentiator these services can provide in attracting subscribers. It's why Netflix has struck expensive deals with Relativity Media for access to hot movies; it's why Amazon has inked licenses with Warner Bros. for exclusive access to shows such as The West Wing; and it's why many players in the space including Hulu are pursuing original content.

But Davis, on the other hand, hints that Redbox won't be taking a quantity-over-quality approach to acquiring content. Rather, he says, Redbox's offering might look a bit more like the strategy pursued by HBO Go, which features less content but offers viewers access to a fresher, more curated library of movies and shows. "I think there's a point where as consumers, I mean, do you really need 100,000 titles? I mean, really?" Davis says. "We want to keep it very simple, with movies that matter. I think trying to win the war on, you know, here's another 10,000 titles--we have to focus on what's going to be really important for us."

Of Netflix's expansive streaming catalogue, Davis says, "It's overwhelming, and so much of Netflix's offering is TV."

Davis declined to reveal the future price plans of Redbox Instant or how the service will be bundled with Redbox's physical offerings. But past interviews with Coinstar and Redbox executives signal the company is interested in offering subscriptions that combine physical and digital content. Whatever the eventual offering is though, it's clear the emphasis will be on curated content. The Coinstar chief compares the strategy to when Redbox first started competing against Blockbuster for DVD rentals.

"Had Redbox started by trying to replicate what Blockbuster was doing with all this variety, it would've very quickly become too complex," Davis says. "But Redbox said, 'Let's narrow the offering, and let's make it super simple.'"

Expect the same narrow approach for its streaming service and title war with Netflix.

[Images: Flickr users Justin Litton and Paul Heaberlin]

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4 Comments

  • Naterichmond7

    I agree with the quality over quantity point of view but I
    also want more of a verity then what Redbox is offering this customers! I got
    Dish's Blockbuster@Home service because it’s cheaper than Netflix and I can
    stream 3,000 of Hollywood’s
    best movies to my TV and 4,000 movies to my PC. This also includes disc rentals
    by mail where you have 100,000 titles to choose from by mail and this includes
    games, movies, TV shows and blu-rays by mail. My Dish coworker told me that
    Blockbuster gets new releases 28 days before Netflix and Redbox customers, plus
    you can return you movies to any Blockbuster store with out any late fee's or due
    dates. 

  • Aligatorhardt

    People who want to watch the same movie over and over buy DVD's. Those who want different content choose Netflix. HBO and cable have too much contempt for their customers, and offering the least for the most money is driving customers off. If I look at Redbox, and see only the same old thing, then I walk away with nothing, and continue to appreciate Netflix.

  • Chris Gagner

    I agree that we don't need access to 100,000 different titles for the service to be a good one. Before the days of redbox, movie rental places didn't stock every movie.. they stocked the ones that mattered. If Redbox can strategically go after getting content that people actually want to view, I think they'll be just as successful at streaming as they've been with their kiosks.

  • Aligatorhardt

    If you copy the video store model, then you will suffer the same fate as them.