Verizon and Coinstar/Redbox Joint Venture to Deliver Video Content…
Telecom operator Verizon (NYSE:VZ) and Coinstar’s (NASDAQ:CSTR) movie rental service, Redbox, have formed a 65:35 joint venture to deliver video entertainment through both digital and physical delivery channels.
According to the press release, “the venture’s services will offer all of the convenience, simplicity and value of Redbox new release DVD and Blu-ray Disc® rentals combined with a new content-rich video on-demand streaming and download service from Verizon.”
The JV will launch the yet unnamed, pan-U.S. service in the second half of 2012. It appears to have a business model similar to Netflix (NASDAQ:NFLX) and Blockbuster – both offer digital or physical delivery of content to their subscribers.
Media creator companies would likely welcome another big content customer such as this JV, but their relationship with Redbox has been rocky to say the least with some disputes having reached the courts. Currently, Redbox is boycotting Warner Bros proposed 56 day cool-off period during which the media giant exclusively sells its discs before offering it to content distributors such as Netflix, Redbox and Blockbuster.
Verizon’s Bob Mudge, president of consumer and mass business markets, however, is optimistic and says, “The joint venture will combine the accessibility and value of Redbox with Verizon’s vision for a borderless lifestyle – where consumers easily accomplish what they want or need to do, on their terms, through the power of the network,” said Mudge. “Together, we are erasing old technology boundaries, freeing people to spontaneously enjoy the entertainment they want, whenever they choose, using the devices and media they prefer, at home or away.”
Here’s how these stocks are reacting to the news:
Verizon Communications Inc. (NYSE:VZ): VZ shares recently traded at $37.93, up $0.09, or 0.24%. They have traded in a 52-week range of $32.28 to $40.48. Volume today was 5,350,534 shares versus a 3-month average volume of 13,975,500 shares. The company’s trailing P/E is 44.60, while trailing earnings are $0.85 per share.
Coinstar Inc. (NASDAQ:CSTR): CSTR shares recently traded at $50.11, up $0.46, or 0.93%. They have traded in a 52-week range of $37.43 to $60.71. Volume today was 2,807,094 shares versus a 3-month average volume of 1,006,530 shares. The company’s trailing P/E is 19.34, while trailing earnings are $2.60 per share.
Netflix, Inc. (NASDAQ:NFLX): NFLX shares recently traded at $126.38, down $0.05, or 0.04%. They have traded in a 52-week range of $62.37 to $304.79. Volume today was 4,850,341 shares versus a 3-month average volume of 8,516,020 shares. The company’s trailing P/E is 29.11, while trailing earnings are $4.26 per share.
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