No ‘Redbox Instant’ Subscriber Accounts Were ‘Compromised,’ Verizon Says
After the announcement Saturday that “Redbox Instant by Verizon” will shut down for good Tuesday at 11:59 p.m. PDT, a Verizon spokesman lashed out at media reports that he said gave the false impression that subscribers’ accounts were recently hacked.
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"Please be aware that that there have been erroneous uses of the word, ‘fraud,’ in some stories, based on the service’s previous suspension of its new customer registration process,” Verizon spokesman Les Kumagai emailed us Sunday. “This is incorrect.” About three weeks ago, “after detecting that the new customer registration process was being misused to validate/test stolen credit card information that had been obtained elsewhere, we suspended the process to ensure our systems weren’t being misused to hurt innocent third-parties,” Kumagai said. “Based on a thorough investigation, we have no reason to believe that any customer information was compromised.” It’s important “for our customers to know that their information is safe,” he said.
As for the shutdown of Redbox Instant by Verizon, which was announced on the service’s website (http://bit.ly/1n63lw6) and in emails to subscribers, Kumagai said “the service had not been as successful as either partner hoped it would be. We apologize for any inconvenience this may cause our customers.” The service never publicly disclosed its subscription data, and Kumagai declined to do so again Sunday. Common chat room complaints about Redbox Instant by Verizon were that the service lacked the breadth of content available at other streaming services such as Netflix, and that streaming costs were never as cheap as driving to a Redbox kiosk and renting a DVD or Blu-ray movie.
Redbox Instant by Verizon will refund a full month’s subscription fee to customers who paid for but received only a partial month of service, the website said. Any Redbox kiosk disc rental credits included with a subscription must be redeemed before the streaming service goes dark Tuesday night, it said. Stand-alone Redbox kiosk DVD and Blu-ray rentals will continue to be available, it said. As for what happens to on-demand movies paid for and stored in a digital locker, but not yet viewed or downloaded, the service is “exploring options” for those customers and should have an update “in about two weeks,” it said.
In early August, executives at Outerwall, Redbox’s parent company, said neither partner in the venture was happy with subscriber growth. The Outerwall executives also hinted strongly they might withdraw from Redbox Instant by Verizon before investing millions of dollars more in the venture into which they had already poured $63 million (CD Aug 4 p19).
Outerwall on its Q2 earnings call and accompanying SEC filings said March contractually would be the earliest Redbox could give Verizon notice of withdrawing from the venture. However, the service was being shut down now because “the venture partners chose to act sooner, rather than later,” Redbox spokeswoman Kate Brennan emailed us Monday. “We are not commenting further.” Brennan, like her Verizon counterpart, declined to disclose subscriber numbers, but said: “As has been reported over the past few months, growing the size of the service’s subscriber base over time was its major challenge.”