Verizon and Redbox are developing a new video service to compete against Netflix, which will combine Redbox's kiosk DVD and Blu-Ray rental service with streaming and downloadable video content made possible by Verizon's network.

Verizon and Coinstar (Redbox's parent company) announced the partnership today with a press release and press conference, saying a subscription service "and more" will become available in the second half of 2012. Details were limited due to "competitive reasons."

The joint venture will apparently not include DVDs through the US Postal Service, as Netflix offers. Redbox has kiosks at 29,000 locations nationwide, including grocery stores, convenience stores, drug stores, and at some Wal-Mart stores. "By offering instantly available online and mobile content with immediate access to physical media through rental kiosks, Verizon and Redbox will be uniquely positioned to deliver the best of both worlds—digital and physical—to consumers across the country," the companies said.

Verizon owns 65 percent of the new joint venture, which is also described in an SEC filing, with Redbox owning the other 35 percent. While Netflix is struggling after a shaky 2011, Verizon and Redbox will still have their work cut out for them. No mention of specific content was made, but Verizon said it will use its "industry-wide relationships with entertainment content providers" to ensure a good selection of movies online.