Verizon Communications is in talks with Redbox about an online video service that would compete with the likes of Netflix and Hulu, according to Bloomberg.
The telecommunications would work with Redbox, which runs a chain of movie-rental kiosks placed in front of supermarkets and retail stores, to create a content-distribution plan, Bloomberg said, citing unnamed sources. The deal would provide Verizon with experience on working with content providers and align it with a brand known for movie delivery. Redbox is a unit of Coinstar.
The news comes after Reuters reported that Verizon was ready to create its own online video service, which would be distributed to customers outside of its own territory, where it already offers a pay-TV service called Fios.
A service would allow Verizon to take on other streaming movie services and expand its base of customers beyond its own footprint. The company could conceivably use its nationwide chain of wireless stores to promote the service. Yesterday, Verizon CEO Lowell McAdam said he looked at buying video-streaming site Hulu.
Verizon didn't comment specifically on a Redbox partnership but noted talks were happening.
"Verizon talks to a lot of companies," said spokesman Torod Neptune. "There are no definitive agreements to discuss about anyone at this time."
A spokesman for Redbox wasn't immediately available for comment.
While Verizon's Fios service works like cable, the company's executives have long been frank about its willingness to address customers who desire service "over the top," or delivered through an Internet connection. Verizon, AT&T, the cable companies, and satellite providers increasingly face competition from online video and streaming services offered by the likes of Netflix.
Amazon, for example, offers a library of streaming video through its Amazon Prime service and has been eager to push more consumers on to online content through its Kindle Fire tablet. Microsoft is attempting to take control of the online video experience through its Xbox 360 video game console.
The pay TV companies have also been tinkering with online video themselves with TV Everywhere, a service that is expected to provide access to content from any device--as long as the user is a paying subscriber.