In February 2012, Verizon hatched a plan for a business positioned to go head-to-head with Netflix. It announced it would partner with Redbox–yes, the subsidiary of Coinstar whose DVD-dispensing kiosks you see in grocery stores–to launch Redbox Instant, a streaming platform that combined Verizon’s network infrastructure with Redbox’s branding.
Its value proposition was thus: For $8 a month, you could rent as many DVDs from the kiosks as you want and stream movies online like Transformers. On paper it wasn’t a terrible bet.
But the service was plagued with problems right out of the gate. As my colleague Austin Carr pointed out at the time, Redbox Instant’s library of movie titles was nowhere near as expansive as Netflix’s, Amazon Instant’s, or even Hulu’s. And Redbox Instant didn’t offer any TV shows; Netflix, by contrast, has seen incredible success within the last two years thanks to its investment in original TV series like House of Cards.
Compounding the misery was a security vulnerability unearthed in September 2014. As GigaOm reported at the time, criminals were using Redbox Instant to verify credit cards stolen from other sources. As a result, the service was forced to keep new users from signing up, a stopgap that may have very well been Redbox Instant’s death knell.
Suffice to say, it was difficult for Redbox Instant to compete, and on Tuesday, the service will be taken behind the digital woodshed. In an announcement on its website, Redbox Instant by Verizon announced that it was shutting down officially on October 7, 2014, at 11:59 p.m. PT. Current customers will be emailed about refund information, but the basic gist is that a month’s worth of payment will automatically be applied back to your payment credit card no later than October 24.
In an FAQ posted to its website, the team behind Redbox Instant writes: “The service is shutting down because it was not as successful as we hoped it would be. We apologize for any inconvenience and we thank you for giving us the opportunity to entertain you.”
Here’s the full release:
Thank you for being a part of Redbox Instant by Verizon. Please be aware that the service will be shut down on Tuesday, October 7, 2014, at 11:59 p.m. Pacific Time.
Information on applicable refunds will be emailed to current customers and posted here on October 10.
In the meantime, you may continue to stream movies and use your Redbox kiosk credits until Tuesday, October 7 at 11:59 p.m. Pacific Time.
We apologize for any inconvenience and we thank you for the opportunity to entertain you.
The Redbox Instant by Verizon Team