Outerwall Shares Pop Following Report Redbox Will Unveil New Streaming Service

Shares of Redbox owner Outerwall Inc OUTR climbed 5 percent after Variety reported that Redbox plans to launch a new video streaming service called Redbox Digital.

A closed beta test may be available soon, the report said.

If the speculation is true, it will be a second attempt from Redbox in the video streaming space. In 2013, Redbox unveiled its streaming service called Redbox Instant by partnering with Verizon Communications Inc. VZ, only to close down some 18 months later.

The report said though the earlier attempt was aimed to challenge Netflix, Inc. NFLX with a subscription bundle, the company now seems to have more modest plans.

Redbox Digital is being built as a video-on-demand store similar to iTunes, Vudu or Google Play. Consumers will be able to rent movies or TV show episodes for streaming, or purchase digital copies, the report added.

In addition, Variety said there are plans to integrate the service directly into Redbox's mobile apps, and extend support to TV-connected platforms like Chromecast and Roku.

The report comes after Outerwall's announcement this month that it has hired Morgan Stanley to explore strategic and financial alternatives to maximize shareholder value.

Shares of Outerwall were up 4.6 percent at $37.34.