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Redbox Instant Service Opens to Subscribers After Test

March 14 (Bloomberg) -- Redbox Instant, the movie-streaming venture by Coinstar Inc. and Verizon Communications Inc., began commercial service today, vying with Netflix Inc. and Amazon.com Inc. for online viewers.

The service concluded its testing and began offering sales, rentals and subscription streaming of movies, Chief Executive Officer Shawn Strickland said today in an interview. It had been in testing with a limited number of customers.

“We think we’ve got a real strong market position for getting the titles faster than other services,” Strickland said in an interview. “We’ll grow from there.

The service, which combines streaming with discs available from kiosks, is focused on movies and aims to draw customers from competitors that don’t offer physical rentals, Strickland said in January. A marketing campaign will start next week and the service will be available through Microsoft Corp.’s Xbox console, Apple Inc. products and web browsers, he said today.

With its offering of downloads for sale, video-on-demand, streaming and physical rentals, the Redbox business will be able to offer titles as they become available to competitors in those markets, and sometimes sooner in the case of DVD rentals, Strickland said. Redbox Instant’s partners have identified a potential audience of as many as 35 million users.

Redbox Prices

Redbox Instant, at $8 to $9 a month, is counting on price and convenience to attract customers. Users will get unlimited streaming plus four DVDs a month from kiosks. The service also offers on-demand rentals and digital sales of newer titles.

‘‘There’s a core group of DVD lovers who really see the value,” Strickland said. “They see the value of the four credits and the streaming looks like a very affordable add on.”

Redbox Instant will offer streaming titles from Time Warner Inc.’s Warner Bros. and Epix, which includes movies from Viacom Inc.’s Paramount, Lions Gate Entertainment Corp. and Metro-Goldwyn-Mayer Studios. It also has an agreement with an aggregator that represents other major studios, Strickland said.

New Epix films will be available for rental and purchase at the same time they go to other VOD services. They will become available for streaming a few months later, but also at the same time Netflix and other streamers get them.

Films from Lions Gate, Paramount Pictures, Warner Bros., Universal Pictures, Sony Pictures and Relativity Media will be available for purchase and on-demand rental.

Coinstar, based in Bellevue, Washington, was little-changed at $57.11 at the close in New York. Verizon Communications advanced 1.1 percent to $48.48. Netflix, the online leader with more than 33 million subscribers worldwide, declined 2.1 percent to $188.37.

To contact the reporter on this story: Michael White in Los Angeles at mwhite8@bloomberg.net

To contact the editor responsible for this story: Rob Golum at rgolum@bloomberg.net

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