They’re at it again. After expanding its higher pricing testing to Portland, Oregon, Redbox is doing the same in Austin, Texas. Redbox kiosks in the Austin area are now charging $1.15 to $1.20 per night for DVD rentals. Blu-ray and video game pricing remains unchanged.
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Analyst Eric Wold with Merriman Capital says that while the higher pricing may be irksome to customers, Redbox still represents a great value proposition for its customers.
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Said Wold:
“Although price increases of 15% to 50% could seem aggressive, we believe these prices still represent a significant value relative to other single-use rental options — such as $4 to $5 for VOD and $2.99 for new-release DVDs at Blockbuster,”
As the higher “test” pricing expands, is it only a matter of time before every Redbox kiosk raises its pricing. Are you surprised that the company has been able to retain its $1 per night price point for as long as it has, or are you dismayed that that may be changing soon?
(via Home Media Magazine)
Simple math. Redbox raises its prices 10-50%. I reduce my renting by 10-50%.
If they raised by a dime you’d rent less? Average consumer would pay $.60 more a month. I think many would not alter their behavior. Wouldn’t be the worse thing if fewer used the kiosks and they needed fewer turns per disc to make the same or more money.
Redbox raises it prices XX percent and you reduce renting by XX percent…well all that does is give Redbox the same amount of money with less work. I, on the other hand, have taken a different approach: FIRST I have search more aggressively for promotion codes for free rentals at Redbox and Blockbuster Express. I have been very successful. So there is no percentage increase for me but there has been a substantial savings now that Redbox has pushed me to look for bargains. SECOND I have joined Netflix. You may have to wait a day or two for your movie but there are some big advantages. No driving to and from the kiosk to rent and return…also the movies that arrive from Netflix are in pristine condition. Before remove a movie from the Redbox case you may first want to place on your hands surgical gloves. Am I the only person who rents form a kiosk that holds a DVD by the outer edges when handling it? Netflix cleans all it DVD before sending them out to it customer. Plus that one or two days you have to wait for your Netflix to arrive gives you the opportunity to watch all the streaming movies, concerts, tv shows, etc. that Netflix gives you for under $10.00 a month. Thank you Redbox for raising your price. You pushed me to search for other options.
perhaps you have been living under a rock for the last month or so—your “under $10 a month ” cost thru Netflix will end in 8 days…
Cue the whining.
Right now with the $1 price, I’m using Redbox. Raising the price will either make me go to a Blockbuster Kiosk or if they raise the price, also, I’ll just do what I’ve always done, use my public libraries for free.
I’m not sure that this change would impact how often I use their service but it does impact how I view their company. If they raised it much more though I’d probably forgo their service altogether.
It isn’t the price increase that is so bad, but the increase in the number of unplayable or defective disks found @ the redbox kiosks!
It seems now about *half* the rentals require replacing!!
If they do raise the price then I won’t be renting as much!!
I like movies
As the average American’s finances continue to diminish, Redbox’ flawed thinking and astounding hubris (higher prices for junk movies) is only paralleled by mega-millionaire hedge fund ‘masters-of-the-universe’ junk mortgage schemes – except Redbox won’t be getting a taxpayer bailout.
Think AGAIN, boys! Get good movies (again) and keep the price low – otherwise – look for another job. Your cheap prices for good movies made you what you are. Your new business formula [higher prices for junk movies] is doomed for failure: ask Bernie Madoff. You can write to him in prison for the next 100+ years.
There are more areas with higher prices. In Pittsburgh, we have been paying 1.20 for about 3 months now.
I have one of those “89c/night” kiosks in the gas station I stop most of the time, so I guess I don’t care now for “price testing” in redbox other than them keeping the price pressure for everybody else.
Austin has been at $1.20 for months, I guess you don’t rent many movies. A recent poll they sent out asked if I would rather have a DVD immediately for $3 or wait 28 days. I say wait 28 days. Realistically they could probably go up to $3-3.99 because Redbox and Netflix have put all the brick and mortar video stores out of business. If they raised rates to $3 and lost half their customers they would actually still have more than a 100% revenue increase. And they could probably provide more current titles in their machines because there aren’t so many renters.
Wow, somebody that can actually see the forest thru the tree’s, you are absolutely correct. The big guy’s have already laid the ground work with respect to customer base. They have hidden the losses thru massive and continued growth but, now the profit has to start. They could care less if they loose 10% of their customers if the remaining 90% pays 20% more (or even 50%). Once again they will be the only options left so they will eventually get back any customers they loose at a much more profitable basis. Funny thing is that in this case the consumers are screwing themselves – like lambs to the slaughter.
So all those free movie Mondays reeled us in, now they can raise the prices and most likely will still have at least 80% of it’s regular customers on the line. Twenty cents may not seem like much, but it quickly adds up if you return it late (or keep it for multiple days).
Personally I would rather buy the movie at a discounted price rather than rent…
That was their plan all along.
Yup, and with the competition dwindling we may be seeing an even higher increase in rental prices. I’m not trying to predict the future, but a dime increase now will only lead to a higher increase in the future… If we give in to their price increases now, we will be forced to pay more in the future.
What do you suggest we do to indicate that we’re not “giving in” to their new pricing model? The legal alternatives currently cost more.. or have less convenience. Brick shops cost 3-5x more per night and netflix requires you to wait unless it’s on streaming.. but not everyone is able to reliably stream at a high quality. Amazon, itunes, hulu all cost more and require a decent internet connection as well a way to get the picture onto your TV.
I think redbox is currently irreplaceable to the casual (1-5 per month) movie watcher. Especially if they’re not technically savvy and are intimidated by the idea of downloading content and potentially piping it to their TV. These people would likely continue to use netflix until they reach the price point is closer to the rental stores. … if there are even any stores left in their area.
I currently have netflix and redbox and feel they both serve their purpose well. netflix shipping is good for catching older movies. netflix streaming is highly convenient.. and redbox is great for newer films that aren’t on netflix streaming yet.
An extra 20-50 cents a month for redbox is no big deal to me since their locations are so conveniently placed for me. I’d use it just as often if they cost even $3. I’d just be less likely to recommend them to other people less often due to the diminished value.
I have all but droped RedBox. And NetFlix. I was a long time person with NetFlix. Then the new price deal put me to Good Bye NextFlix. I did join Block Buster with the new two out at a time, and then get two more from the store for free when I take the ones in you get in the Mail. $14.99 a month + Tax.
I am getting (4) DVDs a week. Are 16 a month. Not bad at all. I will keep it going. Until that pull a NetFlix Deal..
Be well all.
getting greedy..keep it at $1.00
it’s not much of an increase, but over time like most companies, they’ll eventually keep increasing somehow..
rent less people, they’ll have no choice but to stay at a dollar………..the selection isn’t that great to begin with…my renting has diminished..
It was probably only a matter of time, but it would push me, as others have mentioned, into waiting for freebe codes or catch BB Express for their non-hotlist movies. It’s been a good ride while it lasted : D
I am not a fan of price increases because it reduces the $ in my wallet and often times it starts an avalanche of increases. The # of rentable movies keeps going down and now I seeing more “rental versions” of movies where there is no bonus content and when Jackass 3.5 was edited for language and nudity I complained right away to get a free code. Lastly, in the past 3 months, everytime I went to rent a movie it was not available/offered in Blu-ray. If you want me to pay more then get better, not worse.
Well Austin is at $1.40 now and I am renting less. Before I was willing to give some of the less mainstream DVD’s a try. Now instead of making it a habit to stop by the kiosk when I’m at the store and impulse rent a movie (or several), I only go when there’s something I want and only get that.
Is Redbox making more or less from me now? I’d say total spend per month on average they’re getting from me is less because I’m now consciously deciding when to even go stand in front of the Redbox kiosk.