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CNN Money has posted an interesting video chronicling the rise of Redbox, how its offerings compare to Netflix and what its plans are to stay competitive in an evolving marketplace. Redbox CEO Mitch Lowe is featured in the video, and offers some answers to common topics and questions surrounding his company. Here are some highlights:

Drawing a comparison between Netflix and Redbox, Lowe has the following to say:

“Netflix continues to build up this huge library with a very small percentage of it being relevant and interesting. What we do is make it easier by continuing to put fresh product in our machines and taking out the stuff that is of less interest.
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Discussing Redbox’s potential adjustments to its pricing plan, Lowe seems to insinuate that a price hike is all but inevitable:

“We started testing $1.15, $1.25, $1.50 and then we have a test which is for the first night and a dollar for each extra night.
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So we’re testing all kinds of different price points, and our ultimate goal is to find the price point that has very little impact on demand.”

Lowe gets a bit cagey when asked about Redbox’s plans to develop some sort of streaming option to keep up with competitors:

“Assuming we build something that our customers love, we can deliver and it’s a profitable business for us, you can assume that [we will]. I think you could ask anybody that question and they’d agree with that.”

(via CNN Money)

29 Responses to “Redbox CEO: Our Goal is to Find Price Point that Won’t Impact Demand”

  1. Member [Join Now]

    Well… it was good while it lasted.

    • Visitor [Join Now]
      Jake [visitor]

      I think the lesson here is: If you live in an area where they are playing around with the price, stop renting from them. When the price returns to $1, resume your rentals.

      Vote with your wallet folks, that’s all CEOs listen to.

  2. Visitor [Join Now]
    tinybrat [visitor]

    OMG, some idiot going to complain about a slight rise in price, which is still $3 less than my blockbuster store?!? We are $1.25 here at my local redbox, and I’m cool with that. I wouldn’t pay $2 for a dvd, maybe blu-ray. But $1.25 is no big deal. I went to the theater the other day, me, my wife and my daughter. How much you ask? Would you believe $24 for tickets plus another $16 for 2 pops, a popcorn and a Dots candy. $40 for 2 hours of entertainment.

    Should have waited for it to come out on video! $1.25 redbox fee, a couple of $1 boxes of candy from Walmart and a 24 pack of pepsi, all for less than $9!!

  3. Visitor [Join Now]
    Farva [visitor]

    Part of the appeal of Redbox is the fact it is only $1 a night. Raising the prices is going to cause some of the appeal to be lost.

  4. Visitor [Join Now]
    Mike [visitor]

    I agree with Farva. Part of the problem also it seems is redbox lately is filled with a bunch of movies I’ve never heard of. It isn’t that good deal if you have to pay three or four dollars(cause you know if this happens they’ll raise it again later) to watch a movie in two days. When I think of redbox I always think of dollar rentals.

  5. Visitor [Join Now]
    firstlawofnature [visitor]

    From a story today…

    Iger, speaking at a conference sponsored by Sanford C. Bernstein today, said Disney hasn’t seen any cannibalization of new DVD sales from Coinstar Inc.’s Redbox, which rents movies for $1 a day.

    • Visitor [Join Now]
      John Small [visitor]

      The numbers reported show a different story but Iger can say what he wants.

      • Visitor [Join Now]
        Consumer [visitor]

        The issue with Disney and Redbox is not the 28 delay. The issue is Disney does not want to sell their product to Redbox at a reduced cost. Iger feels the Disney product has value and that Redbox should pay $15-$18 per unit. If Iger thought Redbox would pay $15-$18 per unit 28 days later he would do it. But Disney knows that Redbox would not agree to those terms. So they sell on street date to Redbox but get the full price.

      • Visitor [Join Now]
        firstlawofnature [visitor]

        Yeah he’s a real dummy and doesn’t know what he’s talking about.

        What reported numbers are you referring to?

        • Visitor [Join Now]
          John Small [visitor]

          Check out YOY comparatives on similar tracking titles for Disney and you will see the light.

          • Member [Join Now]
            Matthew2015 [matthew2015]

            John: What are you looking at exactly? Their box gross? Rentals to box revenue? Are you using DIS data or industry data?


        • Visitor [Join Now]
          Firstlawofnature [visitor]

          And Redbox is the difference right? Somehow I think the CEO of disney knows better than you if Redbox is helping or hurting his business. From his own words he’s coming out ahead by dealing with them. Iger’s comments fly in the face of your so called logic.

          • Visitor [Join Now]
            John Small [visitor]

            He has to report to the shareholders. If he said otherwise he’d be up the creek. Honesty has never been a strong point of Disney CEOs.

          • Visitor [Join Now]
            firstlawofnature [visitor]

            Dude you are funny. I’m going to go with the CEO of Disney over you on this one.

          • Member [Join Now]
            Matthew2015 [matthew2015]

            Do you also take comments from a CEO as fact? What about the BP CEO?

          • Visitor [Join Now]
            Firstlawofnature [visitor]

            One CEO poisoned the gulf of mexico and the other is making a specific comment related to an outside distributor from just one of many divisions. See a difference? Burden is on you to make the case on why the CEO of disney would do a deal with Redbox that wasn’t in his best interests.

  6. Visitor [Join Now]
    Todd [visitor]

    They should leave it at $1 and bring in Blu-ray at $2. What is the hold up onBlu-ray anyway?

  7. Visitor [Join Now]
    tinybrat [visitor]

    You guys do realize that 1 price increase over a period of 5 years is reasonable?! Companies have higher expenses such as higher labor costs and such to deal with, so an increase in price is justifiable if it isn’t outrageous. I am still happier to pay $1.25 for my movie then $5 at blockbuster.

  8. Visitor [Join Now]
    UBM [visitor]

    I agree with Tinybrat, with all the Blockbuster store closings in my area,
    and our last Hollywood Video closing by June 18th, Blockbuster has smelled
    “blood in the water” and all remaining BB Stores here have gone back to the
    $5 a night, plus $3.99 late fee after five night structure.

    Cost are going to go up, and if we want cheap alternatives to BB, we have to go along with it. In the last month, most of my high traffic Walgreens and Walmarts
    that only had one Redbox kiosk now have two installed, and with that,
    it has made renting from them less of a hassle ( less long lines, and
    people who don’t use to figure out the movies they want
    can now stand at one machine while you use the other machine).

    For that alone, I’m willing to put up with $1.25 or $1.50, which puts them
    still below average with 7eleven ($1.98) and Hastings ($1.99), my only other two rental choices.

    They’ll figure out the market can bear up to $1.50, then that’s it.
    People won’t pay $2 unless the 28 day delay on new releases goes away.
    For that, I’d definitely pay $2.

  9. Visitor [Join Now]
    Bookburner451 [visitor]

    i thought the whole point of them delaying the new releases for a month was to keep the prices the same. If you hadn’t agreed to stop selling used dvd’s, you wouldn’t have to worry about making your money back or raising prices. Cancel the new agreement with the studios. You are destroying your cutomer base.

  10. Member [Join Now]

    Look at the prices on everything these days! If Redbox increases its price to $1.50, it’s still a great deal — for one day. My only problem is that frequently I have to pay for a few days, because something interferes and I don’t get to watch the movie right away or return it promptly. That isn’t negligible for someone on a tight budget.

  11. Visitor [Join Now]
    angryjerry [visitor]

    i wont pay more than i am sorry it will impact demand

  12. Visitor [Join Now]
    angryjerry [visitor]

    2 bucks is too much especially with the delay

  13. Member [Join Now]

    i pay ZERO!!! i used 2 of my 4 codes they sent today! the others i wasted!
    use promo codes only. never pay $1 or $1.5 or $2. totally crazy.
    bb express BLUE has better movies and gets them faster than RED and all the free promo codes you will ever need AND the dont store credit card numbers so the same credit cards work every week!! wake up use BLUE, screw RED!!!