According to a notice to customers published on its website, the movie-streaming venture of Verizon Communications Inc. and Outerwall Inc. – Redbox Instant – will be shut down on October 7th.
Rosemary Moothart, Outerwall vice president of investor relations, wrote in an e-mailed statement that the partners in the venture made the decision of shutting the website for business reasons. Verizon, on the other hand, shared that it plans to launch its Internet TV service by mid-2015.
The statement, which was cited by Bloomberg, says: “The service is shutting down because it was not as successful as we hoped it would be.” The venture also apologized to its customers for any eventual inconvenience it would cause and thanked its subscribers for being a part of Redbox Instant.
Redbox Instant was formed a little more than two years ago – in February 2012, with the partners aiming to provide customers with a movie streaming service at the price of $8-9 per month, but failed to pose a serious competition to its larger rivals in the face of Amazon, Netflix and Hulu. The majority stake in the venture has been held by Verizon.
Redbox stopped accepting new customers registrations on June 22nd this year after it detected it was being used for validations and testing of stolen credit-card information. One of the spokesmen of Verizon – Les Kumagai – explained that this was not the reason for the ventures closure, also saying that no customer information was endangered.
Outerwalls stock value rose by 3.6% on Friday to $57.63 prior to the release of the shutdown news, marking a one-year increase of +0.93%.
Verizon Communications Inc. jumped by 0.85% on Friday to close at $49.71 per share, scoring a one-year change of +5.54% and valuing the company at $206.06 billion. According to CNN Money, the 25 analysts offering 12-month price forecasts for Verizon Communications Inc. have a median target of $55.00, with a high estimate of $60.00 and a low estimate of $41.00. The median estimate represents a +10.64% increase from the last price of $49.71.
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