The Redbox Instant by Verizon joint venture wants to have its Netflix (s NFLX) competitor up and running in time for the holidays, according to a Bloomberg report. A Verizon (s VZ) exec told the news agency that the service is currently being tested by 500 of its employees, and that there is going to be a short public beta test before it finally launches between late November and mid-December.
The Bloomberg story also revealed a few more interesting details about the joint venture’s business model. Apparently, Redbox and Verizon are going to pay rights holders per subscriber. That’s different from Netflix, which regularly spends many millions of dollars to license titles for a set amount of time.
Paying per subscriber will minimize the the startup costs of the new venture, but it also means that customers likely will have fewer content options. Netflix is now regularly betting big on exclusive deals, and Redbox Instant by Verizon won’t be able to compete in these negotiations.
The service apparently wants to make up for this by offering access to newer titles through other means: Subscribers will be able to pick up a limited number of disks at any Redbox kiosk as part of their subscription plan, and the company is also going to offer pay-per-view VOD through its website. That means its online offering will more closely resemble Amazon’s (s AMZN) video service, which offers both unlimited streaming of select titles as well as pay per view rentals and sales for newer movies and TV show episodes.