Verizon To Set Up Streaming Service With Redbox

Verizon Communications will challenge Netflix and start a video streaming service this year with Redbox and its DVD rental kiosks.

Verizon and Coinstar, Redbox's parent, say the service will be national and available to non-Verizon customers as well. It adds another leg to Verizon's quest to become a force in home entertainment, and it looks set to compete to some extent with the cable-TV services it already sells. Verizon has its own cable-TV service, called FiOS, in some areas. Its Verizon Wireless subsidiary has also signed a deal to sell service from Comcast and other cable companies in its stores. With the Redbox venture, Verizon is breaking ranks with the cable and satellite industry, which makes its own video streaming services available only to people who also subscribe to its traditional TV feeds. They don't want households switching to Internet-only services, which are cheaper — Netflix charges $8 per month for its video streaming plan. Verizon Communications will own 65 percent of the unnamed venture, with Coinstar owning the rest. Redbox is contributing an initial $14 million to the venture