Redbox is launching an ad-supported entertainment streaming service to take on Disney Plus and Netflix.
The company, known for DVD vending machines in the US, is the latest to join an increasingly competitive streaming marketplace.
The platform’s model differs from that of its main competitors, Netflix, Amazon, Disney and Apple, because it’s completely free to use. The service will be funded by advertisers, rather than subscribers.
It’s not available just yet and is likely to launch in the US before touching other markets. However, a Redbox spokesperson told Protocol that the service would roll-out to more users “in the coming days and weeks”. Seemingly it’s in testing right now and another Protocol source suggested the platform has been under construction for around a year.
Elaborating on the differences between advertising models (AVoD) and subscription models (SVoD), industry analyst Daniel Gadher, from Ampere Analysis, told Trusted Reviews:
“Redbox historically has been a DVD rental business operating vending machines around the US from stores and gas stations. Redbox, in launching an AVoD platform, will join a growing part of the online video market, in terms of platforms and revenue segment.
“Companies such as Pluto TV and Roku in the US have already launched AVoD platforms and our consumer polling data has shown usage of AVoD platforms increasing, although relatively low compared to SVoD platforms.
“Even major studio NBC is pursuing a hybrid model (SVoD and AVoD) with the launch of is direct to consumer service, Peacock. The independent AVoD platforms may be able to utilise older content as well as incorporating channels (Redbox is reported provide TMZ and USA Today for example) to attract consumers. However, as the number of online services continues to increase the battle for consumer eyeballs continues to intensify and entering this market will be increasingly challenging.”
Back in January Ampere Analysis claimed that AVoD could be a huge trend in 2020. Certainly, with so many streaming services on offer, the way to attract audiences who have already signed up for several may be to offer free-to-play services.
The company said: “Ampere Analysis predicts that 2020 will be the year of Advertising supported Video on Demand (AVoD) as free ad models start to build scale and roll-out internationally. This prediction may seem optimistic given the low use of the current AVoD services in the US (at between 3-6% of US online households), but Ampere believes this to be merely the quiet before the storm.”
If it is “the quiet before the storm” then Redbox could have joined the market at just the right time.
This isn’t the first time Redbox has had a stab at streaming though. Back in 2013, Redbox Instant was released, with a subscription model, and intended to compete with Netlix.
To cut a long story (with quite an obvious ending,) short… it didn’t.
Will Redbox’s latest attempt fare any better? Certainly, this time there is at least a point of differentiation. If the ad-supported channel is marketed well and secures content that appeals to viewers, then there is a chance it could carve it’s own small niche in the market. But, for now, don’t expect a streaming behemoth to rival Amazon, Disney and Netflix.