Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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

Index Last Change % Change
Dow 16,102.38 -272.38 -1.66%
Nasdaq 4,683.92 -49.58 -1.05%
S&P 500 1,921.22 -29.91 -1.53%
Treasuries 2.13 -0.04 -1.85%
Data as of 7:11pm ET
Company Price Change % Change
Bank of America Corp... 15.65 -0.29 -1.82%
Apple Inc 109.27 -1.10 -1.00%
Alcoa Inc 9.49 -0.08 -0.84%
Microsoft Corp 42.61 -0.89 -2.05%
General Electric Co 24.00 -0.51 -2.08%
Data as of 4:03pm ET
Sponsors

Sections

Jessica Alba's Honest Company has been sued by a customer who claims the company is making false claims in its marketing and labeling. More

Harlem's Hot Bread Kitchen teaches kitchen skills to low-income immigrant so they can find employment. More

Google has released Chrome 45, which claims to make your browser faster and give your laptop battery extra life. More

Harlem's Hot Bread Kitchen teaches kitchen skills to low-income immigrant so they can find employment. More

Pimco's famous fund once managed by star manager Bill Gross has less than $100 billion in management for the first time since 2007. More