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US telco Verizon has formed a joint venture with Coinstar, operator of the Redbox DVD rental service, to build a new over-the-top (OTT) subscription video offering.

The new service, which will launch nationwide in the US in the second half of 2012, will create a multi-platform offering that leverages Verizon's relationships with content owners, its cloud computing capabilities and IP network infrastructure.

Verizon will hold 65% of the new joint venture, with Redbox to hold the remaining 35%. Additional brand and product information will be released in the coming months.

Our view: This joint venture looks set to shake up the US online video market and make Netflix work a little harder: Redbox has a strong, established nationwide brand, and Verizon has the technological savvy needed to make this service work.

However, there is a question mark hanging over Redbox's contribution to this JV (as reflected in the different stakes held by the two partners): both companies have existing relationships with the film studios, yet while Redbox has an undeniably strong retail presence, the same cannot be said for its online operations.

This is probably the last throw of the dice for the Redbox brand: DVD rentals cannot be sustained as a business in the Netflix era, and if Redbox cannot find success with a partner like Verizon, it is unlikely to do so with any other.

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