Verizon CFO: Redbox Venture to Turn Profitable in 2014
Verizon expects an online video joint venture with Redbox to become profitable next year, CFO Fran Shammo told an investor conference on Monday.
Speaking at the Deutsche Bank 2013 Media, Internet & Telecom Conference in Palm Beach, Fla., in a session that was webcast, he said that the venture, which is a competitor with the likes of Netflix and Amazon.com, would start generating revenue this year.
But he added that it would "at best break even" in 2013. In 2014, however, it will turn profitable, Shammo predicted.
While much of the investor conference discussion focused on wireless industry questions, the Verizon CFO also was asked about his company's FiOS pay-TV service and the programming cost pressures it faces. Shammo said Verizon feels on more of a level playing field with other pay-TV providers these days because it has paid broadcast-retransmission fees from the start, while competitors have only started to pay them over the past couple of years.
Originally set to kick off last summer, the venture, whose service will be dubbed Redbox Instant by Verizon, will launch by early in the second quarter, Verizon has said.
The beta service launched with an $8 monthly subscription price. For $9, customers can opt to redeem credits for rentals on Blu-ray Disc at Redbox kiosks. Customers can also use Redbox Instant by Verizon without a subscription and pick from new releases available for purchase or rental.