Redbox Instant seemed like a great idea when it launched at the beginning of 2013. A partnership between Redbox and Verizon, the service planned to compete with Netflix while offering one thing that Netflix couldn’t: bonus instant DVD rentals from Redbox’s in-person kiosks. It seemed like the two services could coexist happily. They couldn’t. Redbox Instant will shut down tomorrow night, at 11:59 PM Pacific time.

Even before the venture announced that it was shutting down, GigaOm speculated that this could happen because of criminal activity. Criminal activity? Baddies weren’t hurting the service by ripping it off, exactly, but credit card thieves apparently found that the service was great for testing to find whether their ill-gotten card numbers were genuine. Redbox Instant responded by first preventing current users from changing their payment info, then by cutting off new signups.

For a new service struggling to build up its subscription numbers in the first place, cutting off new members is a disastrous idea. Continuing to keep the virtual doors open wasn’t that important to Redbox Instant, though, apparently. They never reopened to new subscriptions.

Current subscribers should receive an e-mail soon or already have, and the company promises that refunds for the unused portion of their subscriptions will appear in customers’ accounts by October 24.

It is refreshing to see this level of honesty in the site’s “Frequently Asked Questions” about the shutdown:

Why is this happening?
The service is shutting down because it was not as successful as we hoped it would be.

What more does anyone need to say than that?

IMPORTANT SERVICE SHUTDOWN NOTICE [Redbox Instant]
Verizon’s Netflix competitor dies from lack of customers, criminal activity [Ars Technica]
Why the writing may be on the wall for Redbox Instant [GigaOm]

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