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Redbox is Testing Higher Movie Rental Prices

By - Source: Home Media magazine | B 20 comments

Following Netflix' subtle price adjustment, Redbox is apparently also playing with the idea of increasing rental prices for movies.

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.

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  • 9 Hide
    CaedenV , August 17, 2011 12:01 AM
    there goes all hope of saving money by getting rid of our Netflix DVDs
  • 6 Hide
    Thunderfox , August 17, 2011 1:14 AM
    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.
  • 0 Hide
    captainnemojr , August 17, 2011 1:33 AM
    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...
  • -5 Hide
    alidan , August 17, 2011 1:55 AM
    captainnemojrYeah, 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...


    because they can, and their isnt anything you can legally do besides not watch the media, but honestly, that isnt an option for most of us.

    personally i would rather be dead than not have entertainment, even if i hate how i get the entertainment more than i haded (insert notable person in history who was hated by all here)
  • 6 Hide
    pocketdrummer , August 17, 2011 3:30 AM
    So, if you're local red box is now more expensive, watch the movie online instead. These tests will turn to the norm only if people buy into it. They aren't offering anything different, and inflation hasn't gone up THAT much.

    Vote with your money. Don't be a lemming.
  • -5 Hide
    K-zon , August 17, 2011 3:59 AM
    Haven't used one, think i looked at the selections one time about it. Other then that its a nice idea but I didn't quite get it though, cause you do have to return them, yes? something like that?? or just throw away.

    Having the extra change to say might be the issue of use , only thing i could think of sometimes. Or just the change.
  • 1 Hide
    doyletdude , August 17, 2011 4:41 AM
    We can think all we want that Netflix and Redbox are just trying to rip us off with these price increases but the true folks at fault are the movie studios. First off .15 to .20cents more isn't that much but if the dicks up at the big wigs would stop doing everything in there power to kill redbox and netflix we wouldn't be facing price hikes. The biggest and greatest dick move was giving blockbuster 30day headstart on major movies, killing the new release buzz for redbox. And now they try to charge netflix more for the dvd's they use than other places. I support Redbox and would pay a little more to stick it to the Man.
  • -3 Hide
    demonhorde665 , August 17, 2011 11:54 AM
    alidanbecause they can, and their isnt anything you can legally do besides not watch the media, but honestly, that isnt an option for most of us. personally i would rather be dead than not have entertainment, even if i hate how i get the entertainment more than i haded (insert notable person in history who was hated by all here)



    ^ and this is what's wrong with oru country these days .. have you ever ehard of books?


    Seriosuly thoguh jokes aside bro , you could always read abook when movie rentals get to high. the reason why wea re in debt is because msot eh country , the goverment , in general spends money we/they don't have. think of it on these terms , if you had the choice , eat or get to watch a movie i'd think you'd be inclined to eat , but saddly in thsi day of credit cards and what not folsk do both when they can't afford both , food , is anecessity , movies arnt. :) 
  • -3 Hide
    bloodlust22 , August 17, 2011 12:23 PM
    pocketdrummerSo, if you're local red box is now more expensive, watch the movie online instead. These tests will turn to the norm only if people buy into it. They aren't offering anything different, and inflation hasn't gone up THAT much.Vote with your money. Don't be a lemming.


    Here's a more noble idea. Torrent and download everything, Hey it's free! You get the best of both worlds, The big wigs and overpaid actors get the shaft and you still get to eat your cake too! I haven't rented a movie in years.
  • 3 Hide
    NuclearShadow , August 17, 2011 1:21 PM
    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.



    captainnemojrYeah, 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...


    You two need to realize that Blockbuster was the top dog back in the day and they had good reason to charge so much compared to competitors. They had much larger stores than most video rental places which they no doubt had to pay higher rent for. They had a much larger selection and more copies of movies and video games than all of their competitors.
    They even tended to have a decent amount of staff working at all times. Naturally they had to charge more.

    Blockbuster's only real flaw is that they did not forsee the change of tides. They could have easily been #1 even to this day and would have likely bankrupted NetFlix. Blockbuster has much more expendable resources than any competition even when NetFlix first spawned.
    All they would have had to do was copy NetFlix rental program sooner , get exclusive rental deals of big name movies, and charge a similar to slightly lower price. The young and then future uncertain NetFlix wouldn't have survived. The only problem however is they would have become their own competitor to their actual stores and they would be closing them down anyways.
  • 2 Hide
    drwho1 , August 17, 2011 1:42 PM
    I "rent" movies on my local library for FREE and I can keep them for 7 days FREE.
    Even brand NEW movies.
  • 2 Hide
    dawolf74 , August 17, 2011 2:31 PM
    For you guys with short memories. Blockbusters customers sued Blockbuster over charging $1 a day rentals and rental penalties. The class action lawsuit basically stated this was gouging and price inflation, etc., etc., etc.

    So, BB changed the pricing structure, because the customer demanded it (using lawyers), and of course the customer is always right.

    So, Redbox comes around, uses BB's old pricing structure that they got sued for, and everyone loves Redbox.

    As far as I can tell, the American consumer has no clue what they want, except they want it for as close to free as possible, while still getting high paying jobs from the corporations the low prices "stick it to".

    All you people b@%#%@ing about BB charging a $5 day price for a 5 day rental instead of letting you guys keep it for a day for $1 is because 99% percent of you turn in the movie later then a day, then come into the store and argue that the charges should be forgiven. While the movie was not available to rent out to another customer, why, you shouldn't have to pay for that potential loss of business, it's BBs fault you couldn't drive past the store, of course!

    Also, since DishNetwork bought BB, the pricing structure is much more reasonable, and they have regular giveaways, so I wouldn't poo-poo their business model as of late, unless you have already checked it out.
  • 1 Hide
    matt_b , August 17, 2011 3:53 PM
    doyletdudeWe can think all we want that Netflix and Redbox are just trying to rip us off with these price increases but the true folks at fault are the movie studios. First off .15 to .20cents more isn't that much but if the dicks up at the big wigs would stop doing everything in there power to kill redbox and netflix we wouldn't be facing price hikes. The biggest and greatest dick move was giving blockbuster 30day headstart on major movies, killing the new release buzz for redbox. And now they try to charge netflix more for the dvd's they use than other places. I support Redbox and would pay a little more to stick it to the Man.

    You bring up valid points, but forget one major and main point - the actor's cut. What's wrong with Hollywood is exactly what's wrong with sports. Actors and players get exorbitant paychecks for doing something that most people won't make in a lifetime. Every business is there to make money, but when excessive contracts are written, cost of production or ownership increases and that is what gets passed on to you. Next time you pay $12 for a movie ticket or $100 for a ticket to your ballpark, you need to think about what you're supporting. As long as people pay these prices, sports club owners and Hollywood studios will continue to view passing on the operating costs as accepted. These actors and players only get these ridiculous paychecks because your ticket purchase fuels them.
  • 1 Hide
    cTs Corvette , August 17, 2011 4:06 PM
    I haven't rented a movie from Redbox (or anywhere else) in months. Not because I object to the price, but rather because I object to the crappy content of the movies Hollywood is putting out these days.
  • 0 Hide
    hellwig , August 17, 2011 4:32 PM
    THAT'S IT! I'm officially cancelling my RedBox subscription. Clearly, RedBox is interested in only one thing, MONEY!! Apparently RedBox doesn't care about entertaining people anymore! But seriously, I'm already paying $1.50 to get BluRay disks over standard DVDs, so a mild price hike like this isn't a big deal. Like the article says, it sure beats paying $5.99 to OnDemand a video from the cable company, or $4.99 to stream that movie from BlockBuster or VuDu. And Netflix, well, it will be 6-months before it's on Netflix, and it probably won't make it to the streaming service which is all I subscribe to.

    cts corvetteI haven't rented a movie from Redbox (or anywhere else) in months. Not because I object to the price, but rather because I object to the crappy content of the movies Hollywood is putting out these days.


    Same here, I thought I broke by Redbox drought recently because there was even less on TV this past weekend (although I do regret spending $2 on Skyline and SuckerPunch, and yes, I realized after the fact that Skyline is on Netflix online). I loved RedBox, and have used it since it first came to my location 5+ years ago. But there's so many aweful movies out there, I don't want to see them at all, much less pay a $1 for them, or now a $1.15 in certain markets.

    Hollywood blames the internet for their poor box office performance, even though box office revenue has never been higher despite the crap they put out these days. In reality, Hollywood studios should be happy just knowing their movie was popular enough to torrent in the first place, and not just ignored all together (no, I don't condone piracy, I'm just saying, the torrent for Howard the Duck probably isn't straining anyone's download caps).

    Still,
  • -1 Hide
    gallidorn , August 17, 2011 5:02 PM
    At least they aren't charging $5 for a 5 day rental like Blockbuster did for so many years.

    If this increase could provide them with 26 million dollars in profit, they better reinvest that money into providing online streaming rentals!

    If redbox was smart, they would provide streaming rental services at $1 each, because they could make way more money that way. Customers would not have to go to the redbox to return movies, so they could continue to rent over and over and redbox would not have to wait until the following day to get the customer to rent more movies. Not to mention that redbox would not have to purchase DVD or Blu-Ray movies. Digital rights are less expensive overall and they don't have to worry about damaged discs or unreturned movies.

    If redbox wanted to take netflix's market share, they need to wake up and make a power move towards streaming movies.
  • 0 Hide
    Anonymous , August 17, 2011 5:47 PM
    Don't be greedy Redbox! It's a slippery slope.
  • 0 Hide
    hang-the-9 , September 20, 2011 2:12 PM
    bloodlust22Here's a more noble idea. Torrent and download everything, Hey it's free! You get the best of both worlds, The big wigs and overpaid actors get the shaft and you still get to eat your cake too! I haven't rented a movie in years.


    Hey it's illegal! Plus if everyone did that where would the money come from to continue making the movies? You can watch your free $400 budget movie filmed in a kids back yard all day long then.
  • 0 Hide
    apple1 , October 2, 2011 9:20 AM
    How are these systems affected by the micro-stuttering seen on some mid-range cards you studied? A big point of interest overlooked?
  • 0 Hide
    Anonymous , October 28, 2011 3:36 AM
    People can try to rationalize this all they want but 20% is a large increase, especially when the companies profits have doubled since the Neftlix folks like me went to Redbox because of they way we were thanked for doubling the profits at Netflix. The bottom line is movies are a luxury and raising prices in a recession is always bad business. I predict now that Redobx is making the same hairbrained mistake as Netflix (raising prices in a recession, even though their profits have doubled) that they will go the same way as Netflix and return to the obscure box at the supermarket that, for the most part, people won't patranize. Movies are still a luxury and in a recession I'll pay a buck a movie (the same way I paid less than a buck a movie with Netflix's DVD plan) but I won't pay more - especially when the company I'm patranizing is makine more money than they ever made before. Peole can blame the movie studios all they want but Redbox was obviously making money (more than in their history) with the $1 a rental price, so lets face it the cost of licensing couldn't have been all that bad. Not that the studios deserve a pass, which is why I feel they deserve all the pirating that peole are doing - heck they pay actors ridiculous salaries, rip off the general public, and then those same actors protest people on Wall Street for making a fraction of what they make. Overall, I've had it with the entertainment industry in the US and now that my Netflix alternative has gone the same route that drove me away in the first place I guess going back to cable is looking better and better.
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