Redbox Instant Is No Match for Netflix, Inc. (NFLX)

No original content: But probably the biggest difference going forward will be in the original content arena. Netflix and Amazon are both barreling down that path, hoping to extend the moats around their streaming brands with compelling titles that are exclusive to their services. Netflix, Inc. (NASDAQ:NFLX) just released House of Cards and is prepping a handful of other original shows for later this year. Amazon is piloting a dozen of its own exclusive titles.

But Coinstar and Verizon are aiming to keep costs down for the Redbox Instant service, which makes expensive original content deals unlikely. Sure, Coinstar just took out $400 million in new debt that could be used for scooping up more content rights. However, the automated retailer has other projects to fund that are much closer to its competitive strengths.

Bottom line
The Redbox Instant service could make for a compelling value, particularly for customers interested in movies and video games. But it isn’t a substitute for the type of wide-selection, TV dominated streaming service that Netflix, Inc. (NASDAQ:NFLX) sells to its subscribers.

Coinstar and Verizon are being cautious on costs so that spending doesn’t risk torpedoing either company’s balance sheet. The flip side to that caution is a service that aims at just a small subset of the online video market. There’s room for Redbox Instant to turn a profit here, but don’t expect it to poach many of Netflix’s 30 million streamers.

The article Redbox Instant Is No Match for Netflix originally appeared on Fool.com.

Fool contributor Demitrios Kalogeropoulos owns shares of Netflix. The Motley Fool recommends and owns shares of Amazon.com and Netflix.

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