) and Toys 'R' Us are teaming up to launch a streaming video
service that will allow moms and dads to rent kid-friendly movies
for as low as $2.99. Toys 'R' Us will offer the rentals --
including TV shows that start at $0.99 -- at
. Described as a "digital entertainment service that provides
families instant access to the movies and TV shows kids love,"
the service contains
more than 4,000 titles
, all of which were "specially selected to supply hours of
entertainment and fun for parents and children."
Similar to Apple's (NASDAQ:
) iTunes, Sony's (NYSE:
) PSN and Microsoft's (NASDAQ:
) Xbox Live services, Toys 'R' Us Movies will allow consumers to
obtain digital streams and downloads of select movies before they
are available to purchase. The first early release is DreamWorks
) Madagascar 3: Europe's Most Wanted. Users can
the film for "unlimited viewing on any activated device, with the
ability to download to 5 devices and stream to any compatible
device," Toys 'R' Us announced, at a price of $15.95. The DVD,
which has a
of $17.96 at Amazon.com (NASDAQ:
), will not be available until October 16.
Toys 'R' Us will deliver content from a wide variety of
well-known studios, including 20th Century Fox, Anderson Digital,
Gaiam Vivendi Entertainment, Lionsgate/Summit (NYSE:
), Magnolia Pictures, NBCUniversal, Paramount Pictures, Phase 4
Films, Sony Pictures Home Entertainment, Starz Media, The Walt
Disney Studios (NYSE:
) and Warner Bros. Entertainment Inc. (NYSE:
The new service, which will be powered by Rovi, is set to take
on existing streaming video giants, such as Netflix (NASDAQ:
), Hulu and Amazon Prime. It will also face new competition from
Barnes & Noble (NYSE:
), which announced a
Unlike its competitors, Toys 'R' Us only has plans to sell
kid-friendly material. While the company is bound to exclude
horror flicks like Paranormal Activity, the toy retailer does not
seem opposed to grown-up flicks that appeal to children. The Dark
Knight, for example, is already featured on the site.
Common Sense Media
, a nonprofit group that reviews content for kids, referred to
The Dark Knight as a sequel that is "much darker [and] more
violent than the first." The site believes that the film is
suitable for 14-year-olds, but not children. Does this fit into
the family-friendly content Toys 'R' Us is attempting to
If parents are unhappy with this movie, they will have the
chance to prevent their kids from seeing it, thanks to a full
slate of parental controls. Most video services offer them, so
this is unlikely to give Toys 'R' Us an edge with consumers.
The company might not need that advantage, however. Toys 'R'
Us is arguably a stronger brand than its nearest competitor,
Barnes & Noble. While consumers are buying more and more of
their books online (both digital and physical), toys are still
frequently purchased in-store. This is partially due to the fact
that consumers cannot yet download real LEGO sets, action figures
and Barbie dolls. Three-dimensional printers
could change that
in the distant future. Until then, Toys 'R' Us will continue to
have a lucrative business.
Toys 'R' Us could also have a negative impact on Netflix,
which recently introduced kid-specific portals on all of its
apps. Unlike Netflix, Toys 'R' Us does not yet offer an unlimited
video plan; users must instead purchase each rental individually.
But for parents who don't want to spend $8 a month for Netflix,
Toys 'R' Us offers a low-cost alternative.
After the Barnes & Noble announcement, some believed that
Netflix would not be able to maintain its market dominance. Now
that another player has entered the scene, it is clear that
Netflix's battle will continue to intensify.
(c) 2012 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.