Redbox raises price to $1.20, readies for 2nd battle with studios


This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

This story has been corrected. Please see note at bottom.

Say goodbye to $1-per-night DVD rentals.

Kiosk rental company Redbox said Thursday it is raising its standard price to $1.20 a day to cope with rising costs.


The company’s first price increase since it launched eight years ago comes as Redbox reported strong results for its third quarter ended Sept. 30, possibly fueled by the gaffes of its primary competitor, subscription service Netflix. Redbox revenue during the quarter jumped 28% from a year earlier to $389.8 million, while operating income rose 56% to $83.5 million.

Redbox may face more challenges in the future, however, as several studios that already forbid it from renting their DVDs until 28 days after they go on sale -- including 20th Century Fox, Universal Pictures and Warner Bros. -- are considering extending that delay to as much as 60 days in an effort to boost more profitable sales and video-on-demand rentals.

Such a move would make it more difficult for Redbox, which has 34,400 kiosks nationwide, to draw consumers interested in recently released movies.

Warners’ deal ends first, in January, followed by Universal’s in April. Redbox Interim President Gregg Kaplan said in an interview that he would oppose any extension of the rental “window” and would consider buying discs from retail locations if those studios decline to sell to them directly for a period longer than 28 days.

Meanwhile, Paramount Pictures, Sony Pictures and Lionsgate have recently extended their agreements to allow Redbox to rent their movies the day they go on sale. Those studios believe they make more money by partnering with Redbox than they are losing from people who opt for low-cost rentals instead of pricier alternatives.

Shares in Redbox’s parent company Coinstar Inc. slipped 10% in after-hours trading, as investors were disappointed in its guidance for the current quarter.


[Updated at 4:40 p.m.: An earlier version of this post incorrectly said that Redbox is raising the price of Blu-ray disc rentals to $2 per night. In fact they remain $1.50 per night.]


Netflix stock plummets as more subscribers leave

Consumers now spending more renting movies than buying them

Redbox revenue, operating income soar

-- Ben Fritz