) and Verizon (NYSE:
) are only weeks away from launching the beta to Redbox Instant,
their long-awaited venture into the world of video streaming. The
service is already featured as a downloadable app from both
) and Apple's (NASDAQ:
Of course, prospective users will have to enter an invitation
code if they expect to participate in the beta. They can sign up at
With backing from two multi-billion-dollar corporations (Verizon
has a market cap of 123 billion; Coinstar has a market cap of 1.5
billion), Redbox Instant could be one of the most powerful services
of its kind. It poses a great threat to Netflix, which has a market
cap of just five billion.
By signing deals with EPIX and other corporations, Redbox
Instant will launch with content from Comcast's (NASDAQ:
) NBCUniversal, Viacom's Paramount Pictures (NASDAQ:
), Lionsgate (NYSE:
), Relativity, Warner Bros., MGM and Sony (NYSE:
) Pictures Home Entertainment. Redbox has yet to provide a full
list of the content that will be delivered through its service.
Amazon Prime (NASDAQ:
) might provide a few clues.
That service signed
more content deals
in 2012 than most of its competitors. The majority of those deals
involved older properties, however, such as Fox's 24 and NBC's
Friday Night Lights.
Very few new TV shows are featured on Amazon Prime, giving Hulu
a distinct advantage. Similarly, Amazon Prime lacks the level of
film content that is featured on Netflix. It also lacks exclusive
deals with Disney (NYSE:
) and DreamWorks Animation (NYSE:
), both of which were secured by Netflix.
Given the number of challenges (and disadvantages) that Coinstar
and Verizon face in launching a streaming video service, they will
need to think about content options that are not yet offered by
their competitors. One such option could be 4K (UltraHD) video.
Thus far, none of the existing streaming video services have
said that they will provide 4K content. They took a similar stance
toward 3D, though numerous individuals
that Netflix is
3D content for PlayStation 3.
Since 3D failed to make a splash with TV buyers, streaming video
providers were wise to proceed with caution. That said, 4K is the
future. It may not be important today. In five years, most
consumers may still be using old televisions that can only achieve
a maximum resolution of 1080p. However, as the price decreases and
as availability rises, the 4K format will begin to take over.
When it does, consumers will want content that takes advantage
of their beautiful TV screens. The streaming video service that
gets there first could prove to be one of the dominant players of
This might seem like a risky investment for Redbox Instant to
make so far in advance of 4K's adoption. This is not a fast
business, however. Netflix did not sign deals with Disney and
DreamWorks for today -- it did so knowing that it will reap
tremendous benefits tomorrow. If Coinstar and Verizon want Redbox
Instant to be successful, they too must think ahead. In the absence
of superior content deals, 4K might be one of the few options
(c) 2012 Benzinga.com. Benzinga does not provide investment advice.
All rights reserved.
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