Redbox raises prices on DVD rentals

October 27, 2011 By Mike Flacy

While consumers are dropping Netflix for cheaper alternatives after the price hike, Coinstar is also dishing out a price hike to consumers that rent DVDs through Redbox around the United States.

Earlier today, Coinstar announced an increase in price on DVD rentals at Redbox kiosks from $1.00 a day to $1.20 a day. The price hike takes effect on Monday October 31 at all 34,000 Redbox stations in the United States. However, two dollar a day video game rentals and $1.50 a day Blu-ray rental prices will remain unchanged for the time being. The company claims that the price alteration was needed due to rising operating costs such as larger debit card fees. However, Coinstar’s earnings have nearly doubled due to more people adopting the rental kiosks over alternatives like Netflix. Investors reacted negatively to the news of the price increase as shares of Coinstar fell ten percent today.

While Netflix didn’t make any attempt to test its price increase before launching to consumers, Coinstar rolled out the price increase in a variety of cities over 2011 to understand how rental patterns would change. Senior management at Coinstar determined that the drop in volume of DVD rentals would be very small. During the third quarter of 2011, Redbox overtook Netflix in market share of DVD rentals. The U.S. market share for Redbox was 35 percent while Netflix was at 33 percent. This is a vast increase from a year earlier where Redbox has approximately 24 percent of the total DVD rental market.

Coinstar and other rental agencies are also facing a possible increase in the amount of time that DVDs become available to rent. Studios are thinking about moving from a 28-day window to a 60-day window for rental copies. This would force consumers to pay the purchase price of a DVD or spend more money on video-on-demand rentals. Blockbuster is also facing resistance from movie studios. Warner Brothers revoked Blockbuster’s ability to rent new releases and the rental chain now has to wait the full 28 days to offer rentals of those films. Blockbuster will be able to sell the Warner Brothers films though.

Showing 23 comments

Benjamin M. Mitchell at 1:27pm 28th October 2011 To hell with that - I'll just torrent it the day after it releases for free and buy the BR when the price drops later on.. Still love to collect the actual disk - but I'm not about to pay 50$ or wait 60 days to watch it when I can download it for free in 1080i the next day. When will they learn that we will pay for the goods but to hell with waiting!!
Rudy Magaña at 6:43am 28th October 2011 torrent torrent torrent torrent torrent torrent netflix torrent torrent
Scott Franklin at 9:17am 28th October 2011 Having killed off the traditional rental outlets both Netflix and Red Box find their true business model and drive to put money on the bottom line.
Scott Franklin at 9:17am 28th October 2011 Having killed off the traditional rental outlets both Netflix and Red Box find their true business model and drive to put money on the bottom line.
Scott Franklin at 9:17am 28th October 2011 Having killed off the traditional rental outlets both Netflix and Red Box find their true business model and drive to put money on the bottom line.
Scott Franklin at 9:17am 28th October 2011 Having killed off the traditional rental outlets both Netflix and Red Box find their true business model and drive to put money on the bottom line.
Scott Franklin at 9:17am 28th October 2011 Having killed off the traditional rental outlets both Netflix and Red Box find their true business model and drive to put money on the bottom line.
Scott Franklin at 9:17am 28th October 2011 Having killed off the traditional rental outlets both Netflix and Red Box find their true business model and drive to put money on the bottom line.
Scott Franklin at 9:17am 28th October 2011 Having killed off the traditional rental outlets both Netflix and Red Box find their true business model and drive to put money on the bottom line.
Scott Franklin at 9:17am 28th October 2011 Having killed off the traditional rental outlets both Netflix and Red Box find their true business model and drive to put money on the bottom line.
Mike Tijerina at 5:21am 28th October 2011 They upped the prices to $1.15/$1.50 in my area earlier this year (Portland, OR). I'm predicting the next big thing will be Pornbox. Same machine, but to access it you have to walk into a little enclosure and close the black curtains behind you.
Mike Tijerina at 5:21am 28th October 2011 They upped the prices to $1.15/$1.50 in my area earlier this year (Portland, OR). I'm predicting the next big thing will be Pornbox. Same machine, but to access it you have to walk into a little enclosure and close the black curtains behind you.
Mike Tijerina at 5:21am 28th October 2011 They upped the prices to $1.15/$1.50 in my area earlier this year (Portland, OR). I'm predicting the next big thing will be Pornbox. Same machine, but to access it you have to walk into a little enclosure and close the black curtains behind you.
Mike Tijerina at 5:21am 28th October 2011 They upped the prices to $1.15/$1.50 in my area earlier this year (Portland, OR). I'm predicting the next big thing will be Pornbox. Same machine, but to access it you have to walk into a little enclosure and close the black curtains behind you.
Mike Tijerina at 5:21am 28th October 2011 They upped the prices to $1.15/$1.50 in my area earlier this year (Portland, OR). I'm predicting the next big thing will be Pornbox. Same machine, but to access it you have to walk into a little enclosure and close the black curtains behind you.
Mike Tijerina at 5:21am 28th October 2011 They upped the prices to $1.15/$1.50 in my area earlier this year (Portland, OR). I'm predicting the next big thing will be Pornbox. Same machine, but to access it you have to walk into a little enclosure and close the black curtains behind you.
Mike Tijerina at 5:21am 28th October 2011 They upped the prices to $1.15/$1.50 in my area earlier this year (Portland, OR). I'm predicting the next big thing will be Pornbox. Same machine, but to access it you have to walk into a little enclosure and close the black curtains behind you.
Mike Tijerina at 5:21am 28th October 2011 They upped the prices to $1.15/$1.50 in my area earlier this year (Portland, OR). I'm predicting the next big thing will be Pornbox. Same machine, but to access it you have to walk into a little enclosure and close the black curtains behind you.
Kelvin L. at 8:52pm 27th October 2011 At least they aren't driving the prices up that crazy like Netflix did....
Lorne Hammond at 3:50am 28th October 2011 What are dvds?
Jon Jung at 3:48am 28th October 2011 Next: name change to Redboxster
Joaquin Andres Hernandez at 3:47am 28th October 2011 Well fuck them too!
Sarfy Sarfaraz at 3:45am 28th October 2011 Netflix Netflix Netflix Netflix Netflix Netflix Netflix Netflix #repeat