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Redbox Instant is shutting down October 7

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Redbox Instant, the streaming video service jointly operated by Redbox and Verizon, is shutting down on October 7. Redbox Instant subscribers were informed via email Saturday of the shutdown, and a notice posted to the website reads:

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

A Redbox Instant spokesperson added via email:

The joint management of Redbox Instant by Verizon has elected to cease operation of the service effective Tuesday, October 7, 2014.  The joint venture partners made this decision after careful consideration.  The service had not been as successful as either partner hoped it would be.  We apologize for any inconvenience this may cause our customers.

The shutdown comes after the service had disabled new sign-ups for three months due to a credit card fraud issue, which not only prevented Redbox Instant from acquiring new customers, but also resulted in existing customers with expiring or revoked credit cards being booted from the service because they weren’t able to add any new payment information. Redbox Instant was quick to point out that the customer’s credit card information wasn’t impacted by the issue; instead, Redbox Instant’s sign-up process was used to verify credit card numbers stolen from other retailers.

Rumors about a shutdown first surfaced about a week ago; at the time, a Redbox Instant spokesperson curiously replied with “no comment” when I asked whether a shutdown was imminent. On Saturday, a spokesperson

Redbox Instant officially launched in early 2013 with a hybrid model that tried to tie subscription video streaming to physical disc rentals. Subscirbers were given coupons to redeem at Redbox kiosks every month, and also had access to a catalog of subscription titles that mostly focused on movies, as opposed to the TV-heavy catalog that has been a big factor in Netflix’s success.

Redbox Instant’s catalog was also significantly smaller than Netflix’s or even the Amazon Prime Instant streaming video catalog, and the service never really gained traction with consumers, leading the CEO of Redbox parent [company]Outerwall[/company] to remark that both his company and [company]Verizon[/company] were ““not pleased” with the subscriber numbers. In that context, the credit card fraud issue may have just have been the final straw.

It’s still unclear what is going to happen to the team behind the service as well as Redbox Instant’s assets. I’ve heard from a source close to the company that the team is still in place; my guess is that at least some of Redbox Instant’s engineers may end up working for Verizon’s online video service, which the company plans to launch some time next year. Asked about possible layoffs, Redbox Instant’s spokesperson had this to say:

While Human Resources matters are private, I can tell you that the Redbox Instant by Verizon team is made up of talented individuals who made great contributions to the service.

And here’s the official word on Redbox Instant’s assets:

We are always looking for innovative ways to serve our customers, but don’t have anything further to discuss at this time.

This post was updated throughout at 5:35 pm with additional information, including statements from a Redbox Instant spokesperson, as well as a clarification with regards to the credit card fraud scheme that prevented the service from signing up any new customers.

13 Responses to “Redbox Instant is shutting down October 7”

  1. I think Redbox Instant would have been successful if they gave it time. Netflix does not provide a lot of new movies; mostly used to watch TV Series. I hope Redbox Instant comes back :/

  2. Brian McGill

    I had redbox instant mostly for the credits that i got for the kiosk. I had a lot of trouble streaming movies through them. The stream would freeze a lot. I very seldom have trouble with netflix.

  3. B.S redbox is a lot better than netflix, I have both subscriptions netflix has the same titles all the time, I don’t even bother watching netflux no more, I like redbox instant better, it had more newer choices than netflix plus i could rent new movies a service netflix does not offer, too bad redbox instant it’s calling it quits it was a better service than netflix period!

  4. I wonder if Redbox is going to reinstall the boxes in the areas where Verizon pressured the company to remove them to force people to sign up for a subscription service hoping it would either be fios or Redbox instant.

  5. Paul Seibert, PMP, CPC,CSM, CSSBB, CSDP, ITIL

    I worked for the Redbox Instant JV at the Verizon campus here in Waltham, MA; They laid off all the Americans the week before Christmas 2013. Like school on saturday: no class. They had so many foreigners working for the Redbox Instant by Verizon Joint Venture when their application came out for PS3, they couldn’t anticipate the surge in subsribers, because all their foreign engineers and product managers had absolutely no idea how important gaming and gaming consoles are to Americans and their streaming movies. The management team at Redbox Instant and Verizon both were not only incompetent but treated their American contractors like garbage. I toast their demise with a Netflix binge-watching marathon. Netflix’s streaming technology is so advanced compared to what Verizon had with RBI that it is the difference between chalk and cheese. It was like trying to build a bookshelf out of mashed potatoes.

    • Paul Seibert, PMP, CPC,CSM, CSSBB, CSDP, ITIL

      Nobody could sign up for the service for three months, and your argument is their technology was equivalent to Netflix and had no bearing on their demise? Their lack of traction with subscribers and poor subscription numbers is well documented and is a matter of public record. Netflix now claims over 35% of peak downstream traffic in North America, with more than 50MM subscribers. RBI ran in the U.S. only, Netflix streams in dozens of countries throughout the world. The RBI technology ran on about seven to ten devices on around five platforms. Netflix runs on thousands of devices on hundreds of platforms. So I think you need to check your facts, Matt.

      • Paul Seibert, PMP, CPC,CSM, CSSBB, CSDP, ITIL

        Looks like I hit a nerve with someone. That is because I know exactly what I am talking about because I was there. The JV let go the entire team a week before Christmas. I was not an employee, I was a contractor working for a third party, and I completed my contract. But I saw what happened there, Anonymous Internet Coward.

  6. It lasted longer than i thought it would. It takes a lot to deliver videos at the quality and price Netflix does. And Netflix is not the same netflix as when they started.

  7. Obviously verizon should buy RBI, rebrand, and build. Verizon could pull this off by just adding video subscription to phone bills. No credit card b.s. No fuss. Heck, they already have millions of customers.