Redbox Instant Throws in the Towel on Their Streaming Video Service

There are a lot of companies which would like to be able to offer a service comparable to Netflix, but it’s not nearly as easy as it may first appear. Verizon and Redbox teamed up together to offer an instant video service they named “Redbox Instant,” but the effort has been far from successful. They have now announced that Redbox Instant will be shutting down for good on October 7, 2014 at 11:59pm PT.

This joint venture was available to anyone with internet access, not just those on the Verizon network, but it never gained the traction it needed to be successful. The site made the announcement it would be shutting down on the site itself, apologizing for any inconvenience and giving instructions for applicable refunds.

Over the last two years, the site has struggled to get noticed. While Netflix accounts for more than one-third of internet traffic in North America alone, Redbox Instant wasn’t able to even break into the top ten. This was at a time when Netflix began focusing more on instant streaming over home delivery.

Even some questionable and underhanded tactics by Verizon against Netflix couldn’t help the service gain traction. During money disputes between Verizon and Netflix, Netflix videos appeared to perform poorly on Verizon’s network across the board. The poor performance of Netflix videos compared to Redbox Instant should have helped the service against its rival, but even that failed to assist it in launching their movie rental project against the powerhouse.

The service has also had its fair share of controversy. After discovering earlier this year that the site was being utilized by criminals to authenticate stolen credit card numbers, the site shut down new membership capabilities. This was likely the final nail in the already ailing site’s coffin. By not allowing new members, the site essentially crippled itself by not allowing itself to grow.

The site’s failure has come as no surprise given its shortcomings. It’s also sent a warning shot to other companies who are eyeing their own Netflix competition. In light of Redbox Instant’s difficulties, Comcast has also decided to pull back its effort to try and compete with Netflix. Their product called Streampix has been pulled from the mass market, and it’s now only offered to paying members. Comcast concedes that it has not been able to come up with a “viable business model” in order to compete against Netflix.

While their instant streaming service is now dead for all intents and purposes, Redbox will continue to offer its core business of providing rentals at kiosks across the country.

(Photo courtesy of saaby)