The deal comes on the heels of what was viewed by investors as a lackluster second-quarter report. While Netflix reported yet another record quarter when it comes to new subscribers and profit, it fell short of revenue forecasts. Investors also fear that its potential base for new subscribers is shrinking.

On top of this, rival Coinstar ( CSTR), which owns Redbox DVD kiosks, is also stepping up its game. The company announced last week that it will expand its reach, rolling out kiosks in CVS Caremark ( CVS) stores.

Last month, the company said it will begin offering Blu-ray DVDs for $1.50 a night in the fall. It has also previously been reported that Coinstar is looking into creating a streaming service.

This, no doubt, will directly hurt Netflix in some capacity, limiting its future growth.

-- Reported by Jeanine Poggi in New York.

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