Redbox is Testing Higher Movie Rental Prices

Redbox has apparently launched a test in which it is now charging $1.15 and $1.20 per day for movie rentals in Austin. This is up from the standard $1 the company usually charges. It is not the first time that Redbox is testing higher prices locally, but the company has generally kept its $1 program in place.

There was no official statement from Redbox, but Eric World, an analyst quoted by Home Media Magazine, feels that Redbox has room for price hikes and if the company did decide to increase prices, its rentals would still be perceived as a bargain.

"Although price increases of 15% to 50% could seem aggressive, we believe these prices still represent a significant value relative to other single-use rental options — such as $4 to $5 for VOD and $2.99 for new-release DVDs at Blockbuster," Wold wrote in an Aug. 15 note.

A price increase appears to be just a matter of time and may be necessary for Redbox to pass on increased cost for DVDs and Blu-ray discs as well as cost of new movie deals.

"While any assumptions could be made at this point, we believe management has enough data at various prices to know what change would yield the greatest positive result," Wold wrote.

The analyst said that a price increase could generate about $26 million in pre-tax income for Redbox.

Create a new thread in the Streaming Video & TVs forum about this subject
This thread is closed for comments
20 comments
    Your comment
  • there goes all hope of saving money by getting rid of our Netflix DVDs
    9
  • In a few years we'll be back to $2, just like we were 20 years ago at every store except Blockbuster. Still a better deal than being forced to pay a week's rental for something you only need for one night.
    6
  • ThunderfoxIn a few years we'll be back to $2, just like we were 20 years ago at every store except Blockbuster. Still a better deal than being forced to pay a week's rental for something you only need for one night.


    Yeah, I remember walking in to Blockbuster ready to get my 1 day rental. They had created the new category "just arrived" on top of 20 years and sooner "new releases" and regular. Then they "allowed" you to keep it 5 days and said it was only $4.99 which was $1 a day. Too bad I only wanted to watch it that night and return it the next day. I guess the sheep are stupid or else they wouldn't do it.

    Funny how in today's corporate America when the competition raises prices, everyone else follows suit...
    0