SAN FRANCISCO (KCBS)— Verizon and Redbox, the company whose DVD kiosks are in grocery stores, are teaming up for a service that will combine physical DVD’s with streaming video.

When asked if this service was a bit like Netflix, KCBS Technology Analyst Larry Magid said it’s actually more like what Netflix used to be.

Magid said details were sparse, but that the companies did put together a press release saying that they’ll combine to offer both streaming videos and DVD’s that can be picked up at the kiosks, presumably at grocery stores and other places.

KCBS Tech Report:

“The irony is that Netflix has sort of moved away from that model. They still have DVD’s, but they no longer bundle DVD’s and streaming into a single price plan,” Magid explained.

According to the tech expert, if you want both, you have to pay for them separately at roughly $8 a month for streaming and $8 a month for one DVD at a time.

Magid said the new partnership is logically a move to take advantage of all the Netflix defectors who left in an uproar when they increased their rates by 60 percent last year.

He does point out that Netflix has picked up some of those lost subscribers.

“It’s not clear what the joint venture [Verizon-Redbox] will charge, whether it’s going to be similar to what Netflix used to charge, or similar to what they now charge for the combined plan,”

Magid guessed it will be somewhere in the middle and that, for competitive reasons, it would be smarter for them to come in at a lower price than $16 a month.

“They want to take advantage of the notion that people want the best of both worlds,” Magid said, noting that newer content would be available on DVD.

You can hear Larry Magid’s Tech Report Monday through Friday at 3:50pm on KCBS All News 740AM and 106.9FM.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)


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