After Redbox Instant shutdown, Verizon is shouldering the majority of costs

Redbox Instant by Verizon, the streaming service that at one point aimed to take on Netflix, shut down earlier this month, but the financial implications of that closure only became obvious this week — and it looks as if Verizon got the raw end of the deal.

As part of a regulatory filing, Verizon revealed Tuesday that it is prepared to write down $100 million in pre-tax losses for the fourth quarter “as a result of the termination of the venture.”

Redbox parent company Outerwall, on the other hand, is walking away largely unscathed. As part of its third-quarter earnings release, the company revealed Thursday that it had invested a total of $77 million in Redbox Instant over the lifetime of the venture.

However, during the same time, Redbox also received cash payments of $70.5 million for those Redbox kiosk vouchers that every Redbox Instant subscriber got every month as part of their subscription, as well as other services. In addition to that, it was able to save close to $30 million in taxes due to its share of the Redbox Instant losses. “The company does not expect a material net financial impact in the fourth quarter of 2014,” the earnings release goes on.

Outerwall and Verizon never revealed the exact details of their joint venture, but Verizon was the majority owner of Redbox Instant and also contributed large parts of its technical staff. Some of these staff members have since moved on to other positions within Verizon, and we may well see some of the technology they developed being reused for the company’s other online video plans, which include launching an online TV service some time in 2015. In other words: Redbox Instant was pricey for Verizon, but it may not have been a total loss.