Several commenters on this site have claimed recently that Redbox kiosks in their areas have been charging more than $1 per night for rentals. The kiosk vendor confirmed yesterday that it is currently testing two different pricing models, one in Albuquerque, New Mexico and one in Harrisburg, Pennsylvania. Kiosks in Albuquerque are charging $1.50 per night, and Harrisburg machines are charging $2 for the first night, with the customary $1 per night charge for additional nights. The higher test prices are for both new releases and catalog titles in both areas.
These tests support Coinstar CEO Paul Davis’ comments last month that at least some Redbox kiosks had software installed that would allow variable pricing.
Our old friend, Merriman Curhan Ford analyst Eric Wold, feels that even if higher rental prices became permanent, Redbox would not lose many customers.
“I still believe consumers will view the value and convenience of Redbox for the immediate gratification of a DVD rental as superior to the other rental options out there. . . Personally, I’m a little concerned about the negative impact to the ‘ per day’ marketing message that is now so widely associated with the Redbox brand.
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. . However, if Redbox is able to push through a higher price point without negatively impacting the brand or traffic/usage to any great degree, then the positive benefit to margins could be substantial.
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”
Wold also feels that if they are successful, higher pricing models may be just the sort of compromise studios are looking for in their battle with Redbox. Either way, Wold thinks that higher prices would have a positive effect for Redbox because they would help offset the increased costs incurred by the company when it acquires titles from retail channels.
Is this limited, higher pricing test going to come and go without lasting effect, or is this the beginning of the end for $1 per night Redbox rentals? If higher prices become the norm at kiosks nationwide, will it affect your Redbox habits? Let us know in the comments.
[via Home Media Magazine]
I’ve seen $2 prices at multiple machines in York, PA too, which I guess falls under their Harrisburg test
Customers will figure this out pretty quick…going to $2 is a much higher price than bricks and mortar stores….think about it…you can get a new release for $4.49/ 5 night rental at Blockbuster…Keep a Redbox rental for 5 nights and it’ll cost you $10? And it’s scratched and you have to take it back to a machine? Welcome back to Blockbuster!
Your math abilities or your reading comprehension fail. 5 nights at the PA test price is only $6. Keep it for 3 days and it’s cheaper than your BB price.
The reality is most people don’t care about keeping a DVD for 5 days, they usually watch it the night they get it. BB giving 5 days makes the few who need it happy, but it mostly makes their per-night cost seem competitive. But if they charged $30 per rental and allowed you to keep it for two months, would you still claim they were cheaper? Same thing.
How often do you keep a movie and watch it for 5 nights? 99% of people pay $5 for it then return it the next day.
I completelty agree! The mathematics are there and they tell us that Redbox is trying to screw us over without us knowing it. If this becomes nationwide they will screw themselves over and Blockbuster will be back in business.
Check out the smaller independent stores – mine is $2/ 1 night or $3/ 5 nights for new releases and $1/ 5 day’s for older titles. Blockbuster is a rip off! Keep the little guy’s around so at least you’ll have a choice!
I think they are wrong in trying to fix something thats not broke! Seems to me that everytime someone comes up with a good thing some accountant tells them that they are not greedy enough and if you jack up the price and provide crappy product you be so much better off!? REDBOX needs to listen to thier customers if they jack up the price I would be more selective in what I rent and won’t take a chance on those iffy movies anymore. So instead of 3 movies I’ll rent one giving REDBOX one less dollar in this transaction, so I think REDBOX will eventually lose money in the long run. I have blu-ray but still rent the regular movies from REDBOX because they are “just a dollar” go higher and I think the higher rental of blu-ray becomes easier to take as there is no alternative.
@ the cheapos – Shut it. You low brows should be getting an education instead of watching movies. Maybe then you wouldn’t be constrained to $1 entertainment.
$2 first night + $1 for additional nights might work. If the average hold time remains at approximately 2.25 days, then Redbox would collect an average of $3.25 per rental and be able to kick back a decent amount of revenue share to the studios. All availability problems would be solved.
While the number of transactions will surely fall, revenue might stay the same. Plus there will be shorter lines and less need to place two kiosks side by side at the same location. All good things.
And Redbox can still appease the cheapos by keeping $1 per day pricing on titles that are four or more weeks old.
I resent that, in no way do I have a low brow.
Ditto. And in no way am I a cheapo either. I’m just thrifty!
oh god, i thought this jackass was gone…;(
2.25 days? They don’t rent buy the hour.
Wow, what a jerk FoxWins comes across as…
I graduated from a T5 university and do pretty well for myself, but I’m a cheap ass bastard. You can’t be all that damn smart yourself if you’re critiquing people for being cheap on a site that probably draws most of its users due to its publishing of free movie codes for Redbox. While you’re busy critiquing others for their lack of education, you might want to look into getting a refund for the one that you received.
Redbox raising the price to $2 will just likely cause me to bump up my Netflix sub to the next level. It makes more sense for me assuming I rent 3 or more titles a month from RB.
All of you people seem to be missing the point: Redbox is turning into C@cksucker video before our very eyes. When you think you have no competition, then you turn back to being the corporate a@@holes that has made BB such a suckcess. When you’re the only game intown, you set the rules and just like BB, peoples butts will start hurting to the point where they won’t do business with you. $1 a day is a fair and reasonable price to pay, especially when I have to call and deal with the meat heads at anyones customer service because the video is destroyed and I cannot find this out until I get it home and try to watch it, which is way, way too late. So go ahead redbox and start messing with the machine that prints money for you and see where you and soon to be only kiosk BB end up: a good idea ruined by greed. You can be Starburps or you can be McDonalds, see the difference in the business model?If not then your too stupid to be in any type of business that involves the general public anyway.
At least one use of the word “co*ksucker” is key to any good argument.
Bravo, Bruce.
Once they start hitting $2 is when I start looking for alternatives. That is reaching the $2 to $3 online rentals I can get from Amazon. If the margins reach only a $1 difference I will download my rentals vs. leaving my house twice.
$2 Redbox rentals certainly makes something like Netflix more attractive to me. I am starting to notice that as Redbox has gained popularity the wait-times at the kiosks have increased noticeably. Which means, that Redbox convenience is decreasing.
Decreasing convenience + Increasing prices…not a good combo in my opinion.
No surprise here. The $1 seemed ridiculously cheap from the beginning. As mentioned in previous posts, the long lines at the kiosks are a perfect example why the price can go up. If the math eventually does not meet Redbox’s expectations, the price will either go back down, Redbox will disappear and/or a competitor will replace them. Only time will tell.
I believe the New Mexico trial is not $1.50 for the first night and then $1.00 for each additional night. It is $1.50 / day period.
Either method works for Redbox because it gets the average 2 day rental up by 50%.
The $2.00 initial price is likely better since the studios usually are happy just taking a cut of the initial rental and letting the late fees (there is that term again) go to the retailer.
Figure $1.20 of the $2.00 goes to the studios, Redbox keeps the late fees and their net income barely drops. Plus they get all of the titles they want shipped directly to them.
If you people really want Redbox to work, you should be cheering for the $2.00 single day price. Then you can rent whatever you want.
Won’t be many codes coming though because Redbox will have to pay regardless of whether you rented is for free or not.
I’m gonna return to my local, independent video rental store (located next door to the grocery chain store) where the cost is $3.50 for 5 nights. I wouldn’t bother with Blockbuster, and will only go to Redbox when I get a promo code (like a lot of us on here). The $1/night (or even $2/night) price point doesn’t bother me, but I dislike the idea of being charged for a 2nd day when it goes into the machine 1-minute late. Not my fault I get to Redbox 30min early and have to stand in a line for slow people to rent something THEN have the machine take 5 minutes to make a simple flipping return! Sorry Redbox, I supported you long enough.
I’m in Albuquerque and wanted to rent a movie a couple of days ago.
As soon as I was gonna swipe my credit card I noticed that they were gonna charge me $1.50. I immediatly cancelled the order.
So and went to my local video rental store.
Not cool Redbox, not cool.
In Albuquerque. My wife called and told me the news from a kiosk. First, she reported that the contract said it would charge us $1.50/per night, not $1.50 then $1/night after that.
Second, she said that the three people in front of her in the line all chose not to rent, citing the price hike. For us, we went ahead and rented GI Joe for tonight; but in the long run it will effect our renting habits. This makes the inflection point for Netflix that much closer for us, and with our Samsung DVD player we can stream movies from Netflix without going to a McD’s, Walmart or grocery store. I wonder what the rental of a Blu-ray is going to be when they offer it?
The price in the Albuquerque test is indeed $1.50 for each night. The original post has been updated.
At $2.00 per movie it’s cheaper to wait for my Netflix disc in the mail.
I agree!! With as many movies and tv shows we go through with our netflix account, it breaks down to we are paying netflix $0.94 cents a disk, and thats with tax.
Like everything else….it was too good to last. I agree that if the price goes to $2 a night, I will go to BB or NetFlix. But I will still watch for promotional codes for one night free rental from Redbox. I guess I get to the Redbox kiosk at good times because I have not had to deal with lines of people ahead of me. As for now, I still only pay $1 so I will stay with them since they are right by the checkout where I shop for groceries.
At the local Family Video they have a big sign outside that says 2 rentals for five days – $1. Hmmm…thats even cheaper than Redbox!
C’mon people. Really?
Two bucks is not going to break the bank and if a Redbox machine is convenient surely you can shekk out two bucks for a couple hours of entertainment.
If you don’t support Redbox they will never survive.
The days of $1.00 a night for new releases are gone. Step up and support Redbox or you’ll end up paying even more at Blockbuster.
??? I thought you always argue against Redbox. Now you want everyone to step up and pay $2 per rental as a way to show our support for Redbox. You sure you want us to pay more to Redbox as a way to show support to Redbox OR as a way to support the big studio’s greedwho are fighting to force Redbox to raise rental prices!!!!!
I have always argued against the $1.00 / night model not against Redbox.
The $1.00 / night model has been broken from day one. The only way they could get it to work was to pawn off all the used DVDs at inflated prices to their distributor which nearly drove the distributor out of business.
I have never been non-stop negative towards Redbox. But I know the industry and how the pricing works and wanted people to see the reality of the situation.
I think it is sad that Redbox is trying to create a proper business model and everyone here is jumping ship as fast as they can.
Like I’ve said before, $2.00 for 2 hours of entertainment is a great deal. I can’t believe the people claiming it isn’t.
If $2 /night then Netflix will be cheaper consider the gas and time spend to the Redbox location. I assume you will not go to grocery shopping everyday right? Even if it is on your way to work/home then you still need to park, get out off car, wait in line…, “Time is money too.”
I didn’t notice the difference at the time of rental but I just checked my bank online and my total charge including tax for one movie for one night was $1.44. What is that, $1.35 + tax.
An online reservation earlier the same day from the same kiosk was only $1 + tax and the next rental from the same kiosk 2 days later was only $1 + tax.
I am in Ebensburg Pa. Possibly a Pittsburgh market, not Harrisburg.
I also noticed that they charged me for a second days rental for 3 movies rented just after midnight on the 27th and returned on the afternoon of the 28th.
The email receipt shows I rented the movies at 11:04 pm on the 26th, not just after midnight on the 27th.
I do wish I could rent the new releases a day early, ha.
I hate calling CS for credit.
Eric at Redbox returned my call last night from a vm I left on Wed morn. He said he had never seen the system show an earlier rent date like it did for me. He credited the charge of course and commended me on finding why the duplicate charge had occured. He said if I hadn’t told him what happened it would probably have taken some time to figure it out.
I also asked about the charge for $1.44 and he came up with an explanation about the system holding the excess tax from tax rates that are barely above an even amount and charging them in lump sum at a later date. He said that charge was not suppose to be applied and he credited that also.
I asked him about the increase in rates and he confirmed the only 2 cities where the test is being done is Hrsburg Pa. and Alb. NM. He said they had no intention of increasing rates any time soon. They have never done any testing to see what increased ragtes would do so they are using this test market to gather data for the future when an increase would have to be put in place.
I mentioned Inside Redbox and he said he has visited the site, and althoough there is no real connection with Redbox he commented positively and said there was some very accurate information on here.
Already paying $2 if you add in gas to get there and also for the return trip. Calculate it out, it might surprise you.
So now you are getting closer to $3. Forget that, I’ll wait for the movie to show up on HBO / Showtime or even regular TV. Spend my money elsewhere.
I’m in the Harrisburg, PA area (Carlisle, specifically). Was at a Giant supermarket tonight and swung by the Redbox, looking for Orphan. Was ASTOUNDED when I saw the $2 price! Of course, this being central Pennsylvania, I never thought Redbox would be TESTING here, I thought the company had changed prices without notice!
I paged through many of the movies, seeing if, in fact, they were ALL 2 bucks. They were, from new releases to the older ones, like “As Good As It Gets”. All 2 dollars. I’m a heavy Netflix user and only use Redbox on impulse or when something is on a long wait on Netflix. This 2 dollar price may not seem like a big deal to some, but after paying 30 bucks a month for Netflix, it might give my “impulse” to use Redbox a slight pause.
people in general are foolish! they will pay the $2. they rationalize whats a few $’s here and there. i of course see it differently. i spread sheet it!
the costs at netflix as i have previously posted are $.60 a disk on avg with blu-ray
adding just .16 more per disk. it does involve dropping off disks at POST office so one trip for gas should be added in too!
but comparing netflix to redbox at $2 a disk is insane! netflix has almost all titles.
redbox has limited titles and blu-ray.
we have 30 or more redboxes in a 10 mile radius here. not a single blu-ray disk in any
of them!!!
will going to $2 hurt redbox? prob not. people are stupid!
will i use them? only to get free movies! why not? everyone else here does!
T
I’m in Middletown, PA (15 mins from Harrisburg) and my husband and I were surprised to see the new $2 price. We didn’t get a DVD that day, decided to wait until a free code came out :) I know it’s just an extra dollar, but when you’re on a budget, every dollar counts. There was a sign on the kiosk too, I guess Giant was getting asked why the price was raised.
They will get less rentals from me!
Now, we rent them more often because it’s only a dollar…even if we don’t know if we’ll like it, but if the price goes up, I know we’ll rent les often and only the ones we really want to see.
Same here. It will mean renting less. Taking less chances on movies that MIGHT be worth it. Now it will just be renting the movies I know will be relatively good.
Michael, Shane….What’s this new thing next to some blogger names that says, Highly Rated, or Poorly Rated? Who is doing the rating:-) How can I get me-self a Highly Rated stamp!!! Okay, so we all know why FOXWINS gets a Poorly Rated BECAUSE everybody in their right mind gives FOXWINS a poor rating for his/her blogs! But I’m nice! I try to be polite with my blogs! Sniffle….sniffle….
Still $1 here in Minnesota. Then again we also have http://e-play.com
the entry clearly states where the tests are.
I would say the price is the main reason I began renting again. It’s also the reason I began buying again. The thought of paying more makes me sad. Letting the studios get what they want doesn’t seem to bode well for consumers long term. They never stop. They will want something else soon enough. I feel like I’m looking into a mirror ball for 2011 and it says the pricing is Top New Releases $3 a night, Regular New Releases and at least 6 month old movies $2, and Very old movies or special offers for $1 such as after the first 5 nights or for promotions, and no free codes. I had said I would consider paying more for Blu-ray, but not very much. Ever since the studios started being difficult last fall my rentals have fallen by huge amounts. I would rather wait for a title to show up cheap in redbox. I was forced to get 3 titles from Blockbuster last week that were Halloween themed and not in Redbox. I made sure to keep them each for 8 days for the $4.99 price per movie for Blu-ray and pass them around to my friends and family to share the cost. Hmm, the studios would have made more if all my family had rented for a day or 2 through Redbox. If I rent less, then I buy less because of my “See Before Buy” policy. If some people are actually dumb enough to pay $2 a night for some decade+ old movie you can get in a Walmart bin for $5, then I really am worried!
Don’t know if you have a Big Lots where you live, but for the two weeks before Halloween they had a decent selection of Halloween dvds for sale for $3–The Grudge, The Ring, and other horror series, etc. Like you say, if Redbox even raises the rental price to $2 for all, it will make consumers pause before they rent. The sad fact is the studios refuse to realize that I’d estimate a good 90%+ of consumers who do buy dvds, refuse to buy until they rent/watch the movie first and know what they are getting. More movies rented/watched=more movies sold.
If they increase the rental price, then mark my words, I will not be using Redbox any longer other than for the free codes (if they still have that too). Netflix is already better as it is, plus the libraries seem to be awesome for movies now. Their increase is their loss.
Oh yeah, Thank G-d e-play is expanding (hopefully soon here) and we have DVDPlay, which isn’t too far from me.
why are we being so stupid of mentioning the promo code??think think think dont you think that someone that post this thread will not mention this to someone? and code be gone forever
you’re not smart.
Plain stupid! Corporate America = GREED. I will no longer be a customer if they adopt this price.
I can still see a movie in a theater for under two dollars, before it even comes out to DVD. Why wait longer, pay more, AND have to watch it on the small screen? $2.00 for one night is a ripoff.
I have a walgreens about 4 blocks from my home so I just shoot over there on my bike. No gas money used. I watch it the night I get it and return it the next day. Total Cost = 1.00
Calm down, everybody. The official policy of RedBox is still “$1 a night DVD rentals”. So until that changes, there is no reason to be alarmed.
Bottom Line: Majority of Redbox customers would rather have new releases delayed by 30 days, per studios’ demands, than for Redbox to increase prices from $1 for Redbox to be able to afford/supply new releases on the exact day the studios release the dvd. Redbox customers want prices to stay low, and occasional promo codes–that’s it! Redbox customers understand that the studios are pressuring Redbox to raise their prices, else be subject to a 30 day delay on new releases. Redbox customers have a lot of common sense and realize that if the new release was a must see for them they would have seen it at the theater–so they are willing to wait the extra 30 days. Now Redbox has to demonstrate common sense and keep their rental price low, even if it means no new releases on the day they are available. If Redbox wants to appease those that demand the new release on the day it is released, then charge $2 only for those first 30 days of a new release. This is acceptable and understandable to the loyal Redbox customer because of the realization that the studios have forced Redbox into this higher price position for new releases. All other dvd rentals need to remain $1 for Redbox to continue as the rental giant.
REDBOX!! What a rip off!! The Better Business Bureau in this area has filed reports of bad business practices of Redbox, as it has cost several Tennessee residents in excess of $100 due to their returns not being recorded even though the Redbox screen admitted the returns had been timely. The late fees resulted in the bank placing overcharges against the customers accounts when Redbox’s $28.00 overdue charge created a overdraft against their accounts. Several of the banks are now pursuing legal action against the Redbox company.
I feel sorry for those people _IF_ that is what truly happened. The trouble is, they have no way to prove it – they might have just kept the disc (in one way or another) and claimed the machine did not record the return. RedBox has no good way of controlling that. They could possibly change their practice to send an email on every day that the DVD is (considered) kept but many people would object that they’re getting too many emails, so RedBox would have to make it optional, but then how do you maintain per-user preferences, and so on and so forth. You do get a confirmation email when you return the disk, so you could say that not getting the email is your indication that the DVD is not considered returned. Then again, I had it happen twice by now when I return the DVD and do not get the return confirmation. But then I call RedBox and they are happy to confirm the return to me over the phone.
Remember, people, you have to have some responsibilities!
I do not see how raising their rental costs will satisfy any movie studio. If anything it appears as though Redbox is passing along their legal fees and overhead costs onto its customers. Apple stood their ground with the recording industry and continued to offer songs at 99 cents each. Now they basically outsell the big box stores and have continued to show profit, just check their stock rates. If Redbox goes to 2 dollars a night I will go back to Movie Gallery or Blockbuster. I rent 3 to 4 movies a week, if alot of people do the same as myself then Redbox will end up losing revenue and be bankrupt shortly. **Message to Redbox** – You got the customer base you currently enjoy BECAUSE of $1 a night rentals, change that and you’ll lose business.
And the other side of the coin is that if they don’t charge more than $1.00 they go out of business. Oh well.
Well I knew it was too good to last. I agree, Rob. I won’t bother if it’s going to cost me four dollars to keep it for two days, that is pretty much the same as Blockbuster. John Small how do you know they will go out of business if they don’t raise prices?
They make the tiniest of profit right now using the $1.00 a day method and that is before you take into account that 3 of the sutdios are making it more difficult for Redbox to get their product.
That means, as time goes forward, Redbox will slip into a loss on their machines due to extra cost to stock them (both in the cost of product and time needed to get the product).
They need to raise their prices so that:
a) They can get their profit levels to a reasonable return so that they can stay in business.
and
b) So that they can please the studios who are restricting them from getting the product.
The $1.00 a night rental level DOES NOT WORK. Redbox knows this and is moving towards higher prices so that they can survive. It is their only hope.
The flaw in your reasoning is that an operational loss does not automatically put you out of business.
A couple of months ago I checked Blockbuster, and the last four fiscal years in a row were all losses. A couple of scattered quarterly profits, but not enough to turn any of the years positive. And they are still in business, which is amazing considering how bad their management has been.
In contrast, Redbox management has been able to turn a profit even with heavy debt service to fund rapid expansion. Even if your projections about increased costs do come to pass, it may hurt Coinstar’s stock but it would not put Redbox out of business for years. And as time passes and expansion slows, their debt gets more manageable, their machines become fully amortized, and profits are inevitable.
So far Redbox management has made the right moves. It is reasonable to expect them to continue to do so. I am not saying they won’t raise their prices, just that they will only do it on their own terms and not just to please the studios. Blockbuster has been very goood at pleasing the studios, and little else, and look where that’s gotten them so far?
Redbox is huge in UTAH and im sure everywhere else in the US, but if Redbox jacks up their price, all those poor students will think twice about spending their dollar bills.. and if its working for redbox, they shouldnt change whats already positively happening for them.. now, if they weren’t being successful, then they would have to change something. In this case, why the need for the change? only change I think is putting out more movies on Redbox.. A wider selection of even some classics or older hit movies would be great too! I love redbox tho so dont change!!! KEEP the $1 a night~~
$2 bucks is too much for limited selection. I’d rather go with Netflix.
Yes the limited selection is the only problem I currently have. Last night while on the phone with Eric at Redbox concerning a billing issue I asked about this weeks with 4 good movies not showing up.
The Narrows,
Aliens in the Attic,
I Love ou Beth Cooper,
The Answer Man.
He said he was disapointed himself with this weeks releases but it was mostly due to the high number of releases for next week. He said he thought there were 13 movies being offered that are released next week.