A buttery and delicious bowl of popcorn is unfortunately not included with your rental.
$1 per night movie rentals a little too rich for your blood? If you live near a University of Wisconsin campus, just stroll on over to a Big Box DVD kiosk and you can pick up a disc for six cents an hour. The kiosks are owned by Mosquito Productions, which currently has three of the boxes located on UW campuses and a fourth outside its offices in Blaine, Minnesota.
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The company says its Big Box DVD kiosks hold up to 15 times the number of discs in a typical Redbox machine, and claims a catalog of more than 100,00 titles. New releases are priced at six cents per hour, with catalog films and Blu-ray discs costing four and nine cents per hour, respectively.
Interestingly, Mosquito Productions owner John Buchmann cites lax Hollywood attitudes towards retailer pricing as creating lucrative business opportunities for companies such as Big Box DVD and Redbox. Says Buchmann:
“Wal-Mart started selling DVDs at a loss to get their feet in the door well before Redbox had any sort of foothold. Since there was only a $7-$10 difference between renting and buying, it was inevitable that the rental prices would go down. . . Hollywood simply hasn’t protected their product on the retail end for years now, and cheap rental services are an inevitable result of that.”
Mosquito Productions is currently looking to expand its kiosk network, and has high hopes that its low hourly rate will resonate with consumers.
Marketing studies have shown time and again that Americans are very focused on up-front expense and not nearly as concerned with long-term costs. That’s the reason why wireless companies, for example, are able to lure people into highly profitable, multi-year contracts with the promise of cheap or free phones. Mosquito Productions may be counting on the same principle to hold here, with renters getting psyched about the six cent per hour rate and then keeping films for an entire night or two. Big Box DVD’s pricing on new release titles translates into a nightly rate of $1.44—nearly 50% higher than an equivalent Redbox rental. On the other hand, of course, punctilious renters who watch and return a movie immediately are getting a fabulous deal.
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What do you think, Insiders? If given the opportunity to rent from either a Big Box or a Redbox, which kiosk would get your business? How well do you think these new boxes are going to be received? Leave us your opinion in the comments.
[via New Tee Vee]
I’d pay 18 cents to return a DVD in 3 hours over a dollar. Times are tough!
I could also see pirates using the cheaper box to get DVDs to copy.
Why else would a company put it on a University’s door step and charge by the hour?
Very true, but I think most pirates nowadays have moved on to Torrent sites. Copying DVDs is also not quite as easy as it used to be. The distributors (Sony especially) are becoming better at encrypting their DVDs. Will it stop serial pirates? Probably not, but it will discouraged the casual pirate.
Love it.
Can we get one on Gilligan’s Island?
What next…
DVDs sold by the pound?
Lets see…
Rent a disk in the eastern time zone, say 1:00PM than fly to the central time zone, returning the disk at 12:40 PM, doesn’t Big Box DVD owe me money?
This is totally a boon for anyone who watches movies right away — or copies them. Then again, it’s also a huge tipoff if the studios even care about people copying DVDs anymore: someone rents four movies and then returns them all two hours later. Hmmm….
Competition! Holds 15 times the movies than Redbox? If Redbox holds 300, that’s 4500 choices! Was that a typo?
Could there be a “super” Redbox coming out soon that’s double the size? With two carousels inside? Maybe four?
And charging by the hour is a RIP, if you get my drift.
Super red box rent by the hour bring it on!!!
Talk about devaluing their entertainment dollar.
I want one near me!
Looks like more competition for Redbox means the movie studios have lost their case about DVD sales….
What your post didn’t address is that in order to get this rate, you have to purchase “blocks” of time. They sell them in $10 blocks and upwards. Kind of a prepayment type of deal.
Still, most students I know could rent a dvd, watch it and return it in 4 to 6 hours.
Actuallly, you only need to buy in $5 increments. If you buy $10 or more at a time, you get free bonus credits, so there’s an enticement to purchase $10, $15, or $20 chunks, which is perfectly fair in my opinion. I think the reason you are seeing many Redboxes move to $2 for the first day is due to credit card fees taking probably 10-20% of a $1 transaction due to a 10-15 cent transaction fee and a 1-2% cut of the total transaction value. Add that up on $1 and you lose 10-20% depending on how low your transaction fee is negotiated. At these low prices, you limit the hit you take significantly by simply by upping the transaction value. BigBox has it right — their minimum charge is basically $5, which minimizes their CC fee exposure. In exchange for that, they let you rent against those credits at a potentially lower rate the Redbox. I like the concept. It’s designed to keep them in business and give people a good value.
Thanks for the info on this. I agree that prepaid can be a good way to go to help keep fees down and finance future purchases.
I am certain Redbox is taking advantage of micro-payment processing fees, which are far less than standard fees. It is my guess Redbox pays less than 10 cents per $1 transaction. However, keep in mind that the average Redbox transaction is somewhere around $2.50, not $1.
Thanks for your reply!
Great info. I was also not aware that some Redboxes are now charging $2 for the first night. Yikes. If that becomes the norm then I will just go back to Netflix.
I’d be in favor of buying $10 chunks if will keep rentals at $1.
I prefer the redbox free movie codes over this. :)) Why pay when you can get free?
free is not always there and this would deffenitly be a plus for people who can watch a movie in 2 hours. I love the idea of a block of prepaid time, redbox should do this like others.
six cents an hour is too expensive. Why cn’t they make it 1 penny hour.
I could see soooo many problems with this machine….People barely understand the redbox process as it is never mind micro managing your HOURLY rentals….People were already complaining about the rental policy for redbox thinking it was ONLY a $1 to rent and can keep it out as long as they want….The only people who would use this type of system are those who have the time to keep track of the time used on the prepaid card so to speak…
And its only good for apartment buildings/hotels/college dorm rooms because its right outside their home so its easy to return right away where as I dont see people driving back n forth to a machine on the same day if its a mile away. You waste more in gas then the cost of the movie….
Uhhh, free is not always good?
excuse mois;
within the last 3 weeks with 5 credit cards
I got 15 movies absolutely FREE!!!
only in America, my friend!!!
Kevlit an early (Dec 11 8:28 PM) responder is right.
Unless one is close to the kiosk or lives in an area where one can safely easily walk or bicycle to it at all hours of the night and day by the hour isn’t that appealing.
The nearest Redbox is 5 or more miles from me and with significant traffic except in the middle of the night 2 round trips can equal 20 miles if one has to go by a circuitous path to avoid congestion and traffic and if they are driving a 10 year old car as I am that’s likely a gallon of gasoline which even at Costco (10 miles away) is $2.80 or more a gallon.
So without other reasons to be going near a kiosk the actual cost at the kiosk is less important than the costs of getting there and back.
If I had one near me, within around 2 miles, I’d make it a movie day once a week. Maybe get 3 movies around 10am, watch the 3 movies throughout the day, and return all 3 at 8pm. That would come out to around 60cents per rental or $1.80 total for 3 dvds!!!
I do not live near this campus but I do not see this evolving past communites that have a lot of pedestrian traffic. I would not want to drive to pick the movie up watch it then drive to bring it back, it seems like too much of a rush. By the hour rentals, count me out.