Redbox to raise DVD prices 20 percent starting on Halloween -- boo!
Redbox, which operates more than 28,000 DVD-rental kiosks nationwide, announced Thursday that it’ll be increasing its daily rental prices for DVDs from $1 to $1.20, effective starting on Halloween. (How’s that for a trick?) “This marks the first price increase for a redbox standard-definition DVD rental in eight years,” said parent company Coinstar CEO Paul Davis. “The change is primarily due to the increase in operating expenses, including the recent increase in debit-card interchange fees.” Blu-ray and video game rentals will remain the same price, at $1.50 and $2 per night, respectively. Redbox also announced that it’ll be debuting a movie-streaming service by the end of year, but no further details are currently available.
So does this 20 percent price increase smack of Netflix-like arrogance? Not really. For one thing, a 20 percent increase is a lot easier to stomach than the 60 percent price hike Netflix enforced on users who wanted both streaming and the one-DVD-at-a-time plan. (Netflix revealed earlier this week that it lost 800,000 subscribers during the last quarter.) And 20 percent is hardly anything when your initial price of $1 is so low. Nevertheless, Coinstar’s stock has dropped around 9 percent during the last two days.
The more pressing threat to Redbox (and Netflix) users is the news that several Hollywood studios are thinking about doubling the 28-day delay placed on new DVD releases, according to Bloomberg News. Studios are attempting to revive slumping DVD sales and encourage consumers to rent via more expensive video-on-demand services. The question becomes: How long are movie fans willing to wait to save a few bucks on a rental?