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 17,689.86 -56.12 -0.32%
Nasdaq 5,128.28 -0.50 -0.01%
S&P 500 2,103.84 -4.79 -0.23%
Treasuries 2.20 -0.06 -2.78%
Data as of 10:22pm ET
Company Price Change % Change
Bank of America Corp... 17.88 -0.25 -1.38%
Micron Technology In... 18.51 -1.39 -6.98%
Facebook Inc 94.01 -1.20 -1.26%
Apple Inc 121.30 -1.07 -0.87%
Frontier Communicati... 4.72 0.09 1.94%
Data as of Jul 31
Sponsors

Sections

Some families are outraged at the sums they've been offered by Lufthansa as compensation for the Germanwings plane crash in March which killed 150 people. More

Fast-food chains that operate in more than 30 locations nationwide are the sole target of a new rule in New York to hike their minimum wage to $15. But consumers and small business owners, as well as some employees, may be the ones to pay the price. More

You can't blame it on the economy anymore. More Millennials now have jobs, but are still living at home. More