In 2012, Verizon teamed up with Redbox to offer streaming video services that competed directly with Netflix. There were questions about how the new service would stack up and everyone understood it was going to be an uphill battle, but most welcomed the competition if for no other reason than to keep Netflix on its toes.
Unfortunately, come October 7th, Redbox Instant will be shut down. There aren"t many details on why the company is shutting its doors, other than stating they weren"t as successful as they had hoped. The company continuously tried to improve their functionality, but in the end, customers decided they preferred doing business with Netflix and Amazon Prime Instant. It"s important to note that this does not impact the big red kiosks that rent discs by the day: That service will remain available.
The bigger question is what happens to movies that customers purchased through the system? The Redbox Instant FAQ simply states, "We’re exploring options for customers who purchased electronic versions of on-demand movies. You’ll receive an email from us shortly, or you can check back here for an update in about two weeks. We appreciate your patience." If customers lose the ability to keep movies that they purchased, it could have a chilling effect on "cloud purchases" in the future.
Source: Redbox Instant | Redbox images via Shutterstock