Redbox plans to take on Netflix with video streaming service

chart_ws_stock_coinstarinc.top.pngClick the chart for more on Redbox parent CSTR. By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney) -- Redbox, the $1 DVD rental kiosk service, said Thursday that it is planning an online video streaming service -- just like Netflix.

Redbox will join with "a partner or partners" to create the streaming service, which "will likely be in the form of a subscription video service," company president Mitch Lowe said in an e-mailed statement.

Lowe discussed the digital service plans at an analyst presentation on Wednesday in San Francisco.

Shares of Coinstar (CSTR), the parent company of Redbox, were up almost 8% in late trading.

The streaming plan puts Redbox squarely up against Netflix -- and it's a boost the company sorely needs. Last month, Coinstar shares plunged 25% after the company lowered guidance for sales and profit for its fiscal fourth-quarter.

The source of the lowered forecast: Redbox offers movies 28 days after their Hollywood releases. In a press release at the time, chief executive Paul Davis said the company had "underestimated the impact that the delay would have on demand."

The company has approximately 30,200 DVD kiosks nationwide.

Meanwhile, Netflix (NFLX) is maintaining the lion's share of the market. The company said last month that it now has 20 million subscribers, which is a 63% increase from the same period last year. Netflix now has more than 6% of the U.S. population subscribing to its service.

On Monday, Netflix shares shares soared to an all-time high after an analyst upgraded the stock. Qualcomm also said it was working to bring Netflix to more mobile platforms. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,804.80 26.65 0.15%
Nasdaq 4,765.38 16.98 0.36%
S&P 500 2,070.65 9.42 0.46%
Treasuries 2.18 -0.03 -1.27%
Data as of 10:32am ET
Company Price Change % Change
Bank of America Corp... 17.62 0.09 0.51%
Apple Inc 111.78 -0.87 -0.77%
General Electric Co 25.62 0.48 1.91%
Intel Corp 36.37 -0.65 -1.76%
Microsoft Corp 47.66 0.14 0.29%
Data as of Dec 19

Sections

New York Magazine reporter Jessica Pressler, who has been caught up in controversy this past week, will not be moving on to a new job at Bloomberg News. More

Investors beware: These 5 global crises are likely to rattle the stock market and world economy. More

Forums in dark corners of the web sell the kinds of hacks that befell Sony. More

Unilever sued Hampton Creek over its egg-free mayonnaise spread Just Mayo. But the company behind Best Foods and Hellman's mayonnaise has now dropped the lawsuit. More

The income of the top 1% jumped significantly in 2012, far outpacing inflation. Not only did this group make a larger share of the country's income, their share of total taxes also jumped from 35% to 38%. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.