It was reported this week that Verizon’s Redbox Instant
service – a streaming video service designed to compete with Netflix – would shut
down operations on October 7. Verizon is not alone; other large companies such
as Comcast have made plays in the online streaming space and also faced
challenges. It’s interesting that in a market where ability to source quality
content would seem to be the key success factor that such large companies with
deep pockets have not been able to find success. In particular, cable companies
and service providers engaged in net neutrality debates need to decide whether
they want to attempt to benefit from the high levels of bandwidth usage by
Netflix and similar companies or commit more to facing this competition head
on.
Along these lines, Deborah Yao of SNL predicts that Redbox
Instant could potentially become a component of Verizon’s own branded standalone over-the-top service, following
Verizon’s acquisition of the property Intel had been developing some time. It
looks as though even though investments in content by these various entrants to
the market have been minimal, that they are still committed to making a
significant play in this space. It will be interesting to see whether or not
these players can leverage its users data, preferences for content, etc. in new
and interesting ways from a digital marketing perspective.
SNL
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