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Redbox Streaming Service To Shut Down October 7th

Posted by Soulskill on from the if-you're-going-to-copy,-at-least-try-to-do-it-well dept.

An anonymous reader writes: Redbox, the company behind the giant red boxes at malls and grocery stores that dispense DVD and game rentals, partnered with Verizon in 2013 to launch a video streaming service to compete with Netflix. This naturally led to accusations that Verizon was throttling Netflix to tilt the scales in favor of Redbox. Well, as of Tuesday, they're packing it in. Redbox's streaming service will shut down at the end of the day on October 7th. They'll be refunding all current customers, though that number took a hit over the past several months as a credit card fraud problem caused Redbox to shut down their billing servers. This meant no new customers could sign up, and existing customers couldn't renew their subscriptions.

64 comments

  1. I didn't know it existed... by rsilvergun · · Score: 1

    Then again I don't rent movies. Still, I'm surprised they couldn't compete with Netflix.

    --
    Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
    1. Re:I didn't know it existed... by Spy+Handler · · Score: 3, Funny

      Nobody can compete with Francis Underwood! Well you can, but you might die in a mysterious subway accident.

    2. Re:I didn't know it existed... by Dahamma · · Score: 2

      "I didn't know it existed..."

      I think you answered your own question in the subject...

      Competing with Netflix is "easy" - if you are willing to outspend them on advertising and content while offering streaming at a lower price, and somehow stealing their mostly satisfied customers in a near-saturated market. Doing it *profitably* is another story - which is why the giants like Apple, Google, Microsoft, etc haven't bothered trying...

    3. Re:I didn't know it existed... by Anonymous Coward · · Score: 0

      competing with REDBOX is easy though, just steal their business model, swipe part of their trademark, and launch http://www.smartblueboxmovies....

    4. Re:I didn't know it existed... by KermodeBear · · Score: 1

      I also never knew it existed. Everyone is aware of NetFlix; a lot of people also know about Amazon Prime's video services, but most people don't seem to use it.

      You can't compete if nobody knows that your service is out there.

      --
      Love sees no species.
    5. Re:I didn't know it existed... by Man+On+Pink+Corner · · Score: 1

      As long as I can't stream any movie I want, the market for streaming isn't even remotely saturated in any sense of the term.

    6. Re:I didn't know it existed... by Dahamma · · Score: 1

      The market for $8 "all you can eat" streaming? It's very saturated in many senses of the term. Basically, you get what you pay for at that price.

      And you can in fact stream (almost) any movie you want, you just have to be willing to pay what the owner of the movie wants to charge you for it, which for new releases is not part of "$8 all you can eat". You want better/cheaper? Fine, but that's not something in the hands of the companies like Netflix or Redbox, it's entirely in the hands of the studios who own the content...

    7. Re: I didn't know it existed... by nwf · · Score: 1

      I have Verizon TV and have seen commercials for it, but still didn't know what it was exactly. Or cared enough to find out. Verizon already rented movies via the VOD, so seemed pointless.

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      I don't know, but it works for me.
    8. Re: I didn't know it existed... by nwf · · Score: 1

      I just don't understand the $8 streaming concept. You pretty much just get old TV shows and crap movies. I'd gladly pay $25 a month for decent and current movies. I have Netflix and like watching some old TV shows, but I rarely watch movies, since it's almost impossible to find anything good.

      --
      I don't know, but it works for me.
    9. Re: I didn't know it existed... by Dahamma · · Score: 1

      The issue is with studio contracts and provider risks. The studios want $4-6 per rental of their new releases and aren't willing to negotiate a (reasonable) flat rate to subscription providers. Netflix wants to keep their costs down and isn't willing to take the risk of offering a more expensive service and hoping customers don't abuse it.

      People who are expecting this situation to eventually get sorted out are going to wait a LOOONG time. The fact is the studios have a model that is designed to pay for their $200M+ production expenses: theatrical release, premium VOD and Blu-Ray release, HBO/premium cable release, and finally (possibly 2+ years later) library release to subscription services. Negotiating flat-rate for the movie just isn't going to happen until it's at the end of that pipeline...

    10. Re: I didn't know it existed... by l0n3s0m3phr34k · · Score: 1

      I think that's why Netflix is doing their own shows now. Can't get the studios to play along? Just make your own movie. They've shown they can make good shows...

    11. Re: I didn't know it existed... by rally2xs · · Score: 1

      You can get mostly "decent and current" but it happens on cable's premium channels and its a lot more that $25. Still, you don't get _all_ the "decent and current" as a lot of what goes thru theaters (I see almost everything except the stuff too stupid for words - Transformers, for instance) still never comes out on even the premium channels. For instance, 2 similar movies, "Olympus has Fallen" and "White House Down" seem to be very different, with "White House Down" all over the premiums, easily obtainable, but I've never see "Olympus Has Fallen" on them. There's some great stuff that I've never seen on the premiums, too. HBO, Showtime, Cinemax, Starz, etc. just don't have 'em. Don't know why.

    12. Re: I didn't know it existed... by swb · · Score: 1

      The problem with this model is that it doesn't account for the back catalog titles which aren't available streaming, either, or only show up for a month or two and then disappear.

    13. Re: I didn't know it existed... by reboot246 · · Score: 1

      If you can't find something decent to watch on Netflix, then you must be one of those people who stand in line when a new movie hits the theater. There were tons of good movies made before last month.

      And Netflix is a great way to watch a series. Just wait until the series is cancelled and then watch every episode in a massive marathon. No commercials!

    14. Re: I didn't know it existed... by porges · · Score: 1

      As it happens, Olympus Has Fallen is on Netflix, presumably exclusively.

    15. Re:I didn't know it existed... by Anonymous Coward · · Score: 0

      One step more.
      I did not know what Red Box was.
      I only recall seeing one of the distribution boxes, and I walked past it without checking out what it was. I may have thought it was something put out for pickup for recycling.
      I can't recall ever seeing one of their advertisements. If it poped up it was probably something I just clicked past, so much clutter these days I have tuned out to all of it.

      From the article, I don't think I missed anything.

      I did hear about Netflix streaming, but I have far too much in my reading stack to budget the time for them.

    16. Re: I didn't know it existed... by zippthorne · · Score: 1

      And they're all available on netflix's disk service, which they're inexplicably trying to kill off before having the streaming nailed down.

      If you want to see one of the good movies made before last month on the streaming service, well.. good luck, it might be on there for a couple weeks some time. If all you want is a Japanese film student's knockoff of one of those good movies, though, you've got hundreds of choices.

      That series thing is pretty good though.

      --
      Can you be Even More Awesome?!
    17. Re: I didn't know it existed... by Dahamma · · Score: 1

      Well, there are a *lot* of problems with this model, not saying it's great, just the way it currently works ;)

      Though there are still a lot of titles out there which aren't available just because they have not yet been remastered for digital streaming, or they have not sorted out all of the various licensing and copyright agreements. Amazingly, streaming often requires getting completely different licensing/royalty agreements from all involved parties like the musical score, poster artwork, screenwriters, actors, etc. It's pretty insane. And even more insane is that often has to be done separately for EACH country it's released in.

      So if I were to point to the #1 cause of content not being available, it's studio shortsightedness (they don't realize they can make more money in volume by making things cheaper) and massive licensing/copyright bureaucracy.

    18. Re: I didn't know it existed... by Dahamma · · Score: 2

      As far as their original content, seems like Netflix has had the perfect combination of risk-taking, intelligent choices, and a bit of luck.

      I read an interview with Kevin Spacey where he said after pitching House of Cards to all of the network and cable channels with lukewarm reception, Netflix jumped all over it. Not only that, when they said, "ok, we'll go film a pilot", Netflix said, "pilot? Forget that, here's $100M, go film a full season. Oh, and we won't mess with your creative vision, we trust you."

      Just like more and more traditional "movie" actors are doing TV because HBO, Showtime, AMC, etc have allowed TV to be smart and edgy (and the filing schedules and promotions are mud mrs relaxed, etc), if you give producers and actors support and creative freedom they are going to start experimenting a lot more with streaming original content.

      Then again, Netflix has basically stated they want to be the next HBO (and HBO is becoming a significant streaming service). Wouldn't be surprised if 5 years from now you couldn't tell the difference between the two - $10-15/mo subscriptions with a mix of original and licensed content...

    19. Re: I didn't know it existed... by swb · · Score: 1

      Re-mastering for digital streaming?

      My guess is this is something streaming services do themselves so that the content is pre-optimized for their specific streaming system and codecs.

      Just about anything that's been on DVD ever should be "ready for digital streaming" which basically amounts to the streamer transcoding it themselves from the source file that the rights holder has.

      I think the bigger issue is the rights holder stuff, which I think would be cleared up if studios and a handful of hollywood assholes would quit fucking around and thinking of ways to milk a 20 year title even further.

    20. Re: I didn't know it existed... by rally2xs · · Score: 1

      If its "exclusively", that might explain why its not on the premiums on the cable.

    21. Re: I didn't know it existed... by Anonymous Coward · · Score: 0

      Netflix: "Oh, and we won't mess with your creative vision, we trust you."

      Spacey: "My creative vision involves giving head to that chick who looks like a young Natalie Portman, and eventually shoving her under a subway train when I get tired of her shit."

      Netflix: "Cool, do you prefer a wire transfer or a bank draft?"

    22. Re: I didn't know it existed... by sixsixtysix · · Score: 1

      Netflix is winning in the crossover race, for sure. HBO can only be a significant streaming service if they ditch the cable/sat subscription requirement for access to HBO Go. It sucks even more when your device (Roku) and provider (Comcast) won't let you use the service, as if any more middlemen contracts need to be established, because it works on other devices (Apple TV) just fine. To be fair, Comcast has made just about as much of HBO's content available on demand.

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      ...
    23. Re: I didn't know it existed... by sixsixtysix · · Score: 1

      there is plenty of stuff that is streamed in hd but not released on blu-ray. perhaps, they don't think it will sell well? regardless, it still has to be digitized the long hard way (i.e. each frame scanned in) . why would they spend money of this? maybe the licensing covers that plus some profit?

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    24. Re: I didn't know it existed... by swb · · Score: 1

      I'm not entirely sure what the process is for converting films to digital video.

      My suspicion is that the studio does this.

      Based on the complaints about many early DVDs, I would wager that a lot were merely telecined -- a good print of the film was literally run through a projector and captured by a digital video camera. Any obvious glitches were edited out (reel changes, etc) and the final product was put through an MPEG2 compressor and used for mastering the DVD. It wouldn't surprise me if even some early DVDs of back catalog titles were made by digitizing the video masters used for making VHS tapes. They were probably D1-type digital masters and seen as "good enough" for DVD which wasn't any higher resolution, especially for back catalog titles that weren't considered blockbusters.

      I'd wager it's only been relatively recently (since maybe the advent of Blu Ray) that they have gotten to the point where film scanning gets done on a frame-by-frame basis with any regularity, and many newer films would be shot on digital resulting in some kind of digital copy of the final edit being turned into a digital master at various resolutions for cable distribution.

      I remember back in the early 2000s back catalog titles wouldn't even be available on DVD and out of print on VHS. Low and behold some would turn up on Cinemax or HBO and then a DVD would be released soon after. My best guess was that the studios were slowly going through their catalogs and digitizing them (either through a high-quality telecine or scanning) just so they could be shown at all.

      I would imagine it's been a long time since major cable movie channels would ever bother with video tape, even D1 format, and if these films were to have any commercial value outside of a film festival where they could show extant 35mm prints the studios had to digitize their catalogs to at least DVD quality. Probably they've since switched to 1080p or higher depending on the title so they could do it once and make broadcast copies, DVD versions and HD versions for blu ray or streaming services.

    25. Re: I didn't know it existed... by Rakarra · · Score: 1

      The issue is with studio contracts and provider risks. The studios want $4-6 per rental of their new releases and aren't willing to negotiate a (reasonable) flat rate to subscription providers

      This is why streaming sucks. This is why it's inferior to the older discs method, and it's entirely because the studios have too much control over streaming and pricing, and therefore they fuck it up. For the last eight years I've been able to rent almost anything I wanted from Netflix for a reasonable price. Now we try shifting to online streaming and we can say goodbye to a good thing.

    26. Re: I didn't know it existed... by Man+On+Pink+Corner · · Score: 1

      HBO can only be a significant streaming service if they ditch the cable/sat subscription requirement for access to HBO Go.

      Cue someone calling you an idiot because you "just don't understand HBO's business model."

      I'm sure they'd be along already if this story were still on the front page. They probably won't go away entirely until HBO is in bankruptcy court and/or ends up being purchased by Netflix. Denial is strong in these people.

  2. Customers by Dan+East · · Score: 4, Insightful

    If you can't let your customers send you money, then there's not much point in being in business. Also, whoever was responsible for setting up their payment system won't be laying claim to that fact in their advertising and testimonial material.

    --
    Better known as 318230.
    1. Re:Customers by stephanruby · · Score: 2, Interesting

      If you can't let your customers send you money, then there's not much point in being in business. Also, whoever was responsible for setting up their payment system won't be laying claim to that fact in their advertising and testimonial material.

      RedBox was a scam. It wasn't a technical issue that shut them down. It was most likely the number of charge-backs that did. I'm just surprised that it took this long.

      They would frequently email you rental coupon codes that allowed you to rent a movie for free (which really, was the only reason I'd get a movie from them, their selection was mostly B movies that you had already seen, or that you wouldn't bother to rent in the first place, so when I had a free code, I'd force myself to to go through their selection to find something I'd like). Then three months later, after having returned your movie on time three months earlier, you'd get a ridiculous charge on your credit card for not having returned the disc to the right rental kiosk.

      The main problem was that there were two kinds of red rental kiosks, sometimes they were both even in the same store. One was called RedBox. And I forget what the other was called. In theory, they were both owned by different companies, but in actual practice, they were both using red kiosks and very similar branding, they both accepted the same custom DVD plastic cases, and according to other customer complaints, both boxes were also operated and serviced by the same technicians.

      And the large fine would work both ways, you'd get a DVD from RedBox and accidentally return it to the wrong one, or you'd get a DVD from the other one and accidentally returned to RedBox (either because you were an idiot, or because you told someone else in your household to return the movie to a red box), and the drastic outcome was identical. Even thought the company had your email address on your file, it didn't bother to notify you that it didn't receive the DVD on its end. It just charged you after three months. And even thought, this problem was happening very frequently and the boxes both shared the same company that serviced them, the companies were apparently not capable of telling each other about any extra DVD they had received by mistake.

      Which is why I think this systematic failure on their end was really an intentional attempt at defrauding people. No doubt, the start up had a legitimate business model at the beginning, but once it couldn't compete on selection (even for the extra convenience and the very reasonable price of $1 a day), instead of opting for bankruptcy, it started scamming people in a systematic way.

    2. Re:Customers by yakatz · · Score: 1

      In my area, there is only one red box and it is RedBox. What else do you have?

    3. Re:Customers by Sri+Ramkrishna · · Score: 1

      Which is why Netflix is now producing their own damn shows and doing a fairly decent job of it.

    4. Re:Customers by Anonymous Coward · · Score: 0

      If you are Canadian, the other "red box" was probably Zip. Maybe not, though, because you say that they only had B movies, but both Redbox and Zip.ca would have all of the new releases (on release day - and so few people rent Blu-ray, it was always easy to see the latest releases) as well as older movies. If you're one of those people that considers Hollywood releases to be inferior to whatever arthouse hipster stuff you like, then yes, you would be disappointed.

      Anyway, the boxes actually started asking upon return "Are you returning a Redbox disc, Zip disc, or ___" and if you chose the wrong one, they wouldn't accept it. Apparently, enough people were like stephanruby and they didn't bother to look at the big label on the disc to see if it was the right one or not. Probably the same people who returned Blockbuster rentals to Jumbo Video.

      Needless to say, the vast majority of people did not have a problem renting and returning the discs.

    5. Re:Customers by zippthorne · · Score: 1

      Why wasn't that encoded into the packaging, instead of a "you lose if you're not diligent, no take backs" question?

      --
      Can you be Even More Awesome?!
    6. Re:Customers by tlhIngan · · Score: 1

      If you can't let your customers send you money, then there's not much point in being in business. Also, whoever was responsible for setting up their payment system won't be laying claim to that fact in their advertising and testimonial material.

      The problem was that RedBox was being used to validate credit card numbers after hackers stole a pile of them. Somehow it was a really efficient way to check your millions of credit cards to see which ones were valid. RedBox caught on and disabled it, which had the effect of even legitimate customers weren't able to purchase or renew, either.

      (And it hits most big companies - a few years ago it was Apple being hit with same - hackers used iTunes to validate the numbers which triggered a bunch of alerts).

    7. Re:Customers by Anonymous Coward · · Score: 0

      This second redbox problem dates back from a couple of years ago. I tried googling for the previous name, but I couldn't find it. According to the more recent customer complaints I found, RedBox still adds bogus charges 3 months, or 6 months, after the fact, but it doesn't even try to justify those errors anymore, it just does them on a regular basis.

    8. Re:Customers by Anonymous Coward · · Score: 0

      I must admit I've stopped looking a their selection one or two years ago. Also, this could just be a Canadian thing. In the US, RedBox is actually suing the three largest Hollywood studios for waiting an extra 27 days before licensing its movies (on top of the normal delay for a DVD release). In any case, the way I remember it, a one-month delay wasn't the problem, the way I remember it, streaming services like Netflix and Hulu had much better selections at the time, but for all I know, this may have changed. I'm just not familiar with RedBox anymore.

  3. won't someone please think of the grandmas by Anonymous Coward · · Score: 0

    Good news! The public library still circulates the tapes! VHS tapes!

    1. Re:won't someone please think of the grandmas by Teresita · · Score: 2

      They already turned all the FotoMat islands in the parking lots into espresso stands, so all they have to do is figure out how to fit a barista and her stuff into a hollowed-out Redbox.

  4. Attn Slashdot by Anonymous Coward · · Score: 0

    Packing it in.

    Packing it on means something entirely different.

    1. Re:Attn Slashdot by nitehawk214 · · Score: 1

      Pack it up, pack it in, let me begin...

      --
      I'm a good cook. I'm a fantastic eater. - Steven Brust
    2. Re:Attn Slashdot by beakerMeep · · Score: 1

      Apparently Redbox will be gaining weight soon

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      meep
    3. Re:Attn Slashdot by l0n3s0m3phr34k · · Score: 1

      I came to win, I don't believe that's a sin...

    4. Re:Attn Slashdot by sixsixtysix · · Score: 1
      FTFY

      I came to win, battle me that's a sin...

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      ...
    5. Re:Attn Slashdot by l0n3s0m3phr34k · · Score: 1

      lol right right!

  5. So um by Anonymous Coward · · Score: 0

    Does this mean Verizon has finally ended its throttling ways against Netflix since NOW they don't have a service that competes with it?

    1. Re:So um by SeaFox · · Score: 1

      LOL.

      It's still people trying to use the unlimited Internet service they paid for, of course Verizon will keep throttling them.

    2. Re:So um by Anonymous Coward · · Score: 0

      Actually, I no longer think Verizon was intentionally throttling anyone - I'm fairly convinced it's just total incompetence. We have been experimenting with their Edgecast CDN service (ie. we want to *pay* them to stream video) and they *still* can't manage to get it right.

    3. Re:So um by Anonymous Coward · · Score: 0

      They ARE doing it right. You pay them money, they do nothing. From their point of view, this is a good thing.

    4. Re:So um by Anonymous Coward · · Score: 0

      It's intentional. We have multiple Cogent and Verizon 100mbit or higher circuits in our US offices. Everyone of them sucks between Verizon and Cogent, some much worse than others. We worked with Verizon and Cogent on a speed issue between two specific locations. Verizon did not provide much help and basically told us there was nothing they could do and everything was fine on their end. Cogent did speed tests one hop before the peering point with Verizon back to our site and it was flying. They showed us graphs showing their end of the peering point to Verizon. There was nothing they could do until Verizon finally agrees to add more connections at that specific peer point and they have been asking for "years". When we brought this up with Verizon we got the same response which was basically their network is fine, please contact your other provider.

  6. Throttling by nitehawk214 · · Score: 3, Informative

    This naturally led to accusations that Verizon was throttling Netflix to tilt the scales in favor of Redbox.

    Well, the accusations were just adding the reason. It was already well known that Verizon has been throttling Netflix for years.

    --
    I'm a good cook. I'm a fantastic eater. - Steven Brust
  7. Well by DaMattster · · Score: 2

    All I have to say is good riddance. It was a lousy service anyway and could hardly compete with Netflix. This begs the question as to why Verizon would not have teamed up with Netflix in the first place. I'm sure the two could have come to a mutually profitable agreement.

    1. Re:Well by Anonymous Coward · · Score: 0

      Yep they sucked. I signed up for the month trial when it launched and their selection was just terrible.

  8. Don't forget Verizon bought Intel OnCue in January by tbetz · · Score: 1

    It was probably a tossup whether Verizon would roll whatever OnCue was to become into the Redbox brand, and then came the Redbox billing clusterf*ck, which made the decision for them.

    Verizon has no need for two streaming video services.

  9. You might very well think that. by Anonymous Coward · · Score: 0

    I couldn't possibly comment.

  10. What? by Anonymous Coward · · Score: 0

    Great job on marketing. I didn't even know redbox had a streaming service...

  11. Good Riddance by Anonymous Coward · · Score: 0

    I was a beta user of the service, and stayed on for two months after it went pay. However, I left with a very bad opinion of both the service and Redbox in general.

    Despite paying for the enhanced service giving you four rentals, I never got the codes until I called them up to complain. There solution was to issue me the 4 codes, after they were expired, and despite promising that it would be fixed, they did the same thing the next month.

    Also, during the beta the available programming was absolutely terrible. There were tons of schlock direct to video horror flicks, really old movies and TV specials. Have you ever seen Benji visit Marineland? That was on their service. When it went pay, it improve only slightly.

    So, just like Circuit City, this demise brings me a measure of joy.

    P.S. It turned me off of the rental box as well, since their customer service was so poor.

  12. Mission Acomplished by guevera · · Score: 1

    Verizon and the rest of the cable/telco cartel have succeeded in extorting rents from Netflix, so now they have no need for an alternate service. A content play was never a natural move for Verizon. Much easier and much more profitable to simply shake down the two or three leading streaming services -- but until they were able to do that, having something like Redbox streaming was an important part of their threat.

    Redbox streaming likely only existed to use as a threat: "nice little business you've got here. Pity if anything started happening to your deliveries and our company took all your customers."

  13. Rebox had a streaming service? by BrookHarty · · Score: 1

    I didnt know. Fire the advertising department before its too late, oh, nevermind.

  14. You know what's crazy? by Anonymous Coward · · Score: 0

    That people still rent DVDs!!! What's even crazier is that people are always at the damn redbox DVD rental at my local grocery store.

    1. Re:You know what's crazy? by WoodstockJeff · · Score: 3, Insightful

      Some people don't have a broadband connection to support streaming media. It is a lot cheaper to rent a DVD or three each month than to support a broadband connection. It doesn't make them crazy.

      Some people watch movies and other things that aren't available on streaming, but are available on DVD. It doesn't make them crazy.

      Now, it is true that there are a lot of crazy people who don't have a broadband connection. And there are a lot of crazy people who watch movies and other things that aren't available on streaming. But that doesn't imply that renting DVDs is proof of being crazy.

      It may just be a symptom!

    2. Re:You know what's crazy? by KingMotley · · Score: 1

      Well, you can't really rent a blu-ray quality movie for a long time anywhere else. Unless you want to wait another 1-3 months, that is. And you happen to be on an ISP that isn't throttling the hell out of whatever video service you want to rent it from.

  15. Phrasing! by fph+il+quozientatore · · Score: 2

    As a non-American: are you telling me it's not porn, with that name?

    --
    My first program:

    Hell Segmentation fault

  16. Tried It by Anonymous Coward · · Score: 0

    A long time ago I tried out the Redbox streaming. It was awful. I can't believe they wasted all those resources keeping it going for this long.

  17. Will the icon finally go away? by toupsz · · Score: 1

    Does this mean I can finally get rid of the Redbox ad on my Playstations?