Redbox To Jack Up Prices Of Game Rentals By 50 Percent, DVDs By 25 Percent, And Blu-Rays By 33 Percent
Redbox is putting the word out that it plans to hike the price of its DVD rentals by 25 percent next month, as well increase the cost of borrowing Blu-ray discs. Effective December 2, 2014, the price for DVDs will increase to $1.50 per day, up from $1.20, while Blu-Ray discs will jump $0.50 to $2. Starting January 6, 2015, the price of video games will triple from $1 to $3 per day go from $2 to $3 per day.
"This is only our second price increase in 12 years, and the first for Blu-ray discs and games, so you can be sure that we made this decision very carefully," Redbox stated in an email. "We know that hearing about a price increase isn't the best news, but we feel it's necessary in order to improve your Redbox experience, while continuing to deliver the best value for new movies and games."
Redbox's pitch that the price hikes aren't for naught is that it will allow the company to offer more personalized recommendations and deals while improving the overall Redbox experience. The company is likely referring to investments it's making into a more sophisticated recommendations engine that would be on par with the one Netflix uses. However, the company has to tread lightly when it comes to price increases.
Low pricing has been the main draw of Redbox, which originally offered DVD rentals for $1 per night before bumping it up to $1.20 in 2011. At the same time, Redbox has to contend with declining revenue, which dropped 5 percent to $1.4 billion in the nine month period ended in September.
Parent company Outerwall chimed in on the announcement.
"With new-release movies for $1.50 a day, Redbox remains the best value in new-release home entertainment. Consumers can continue to expect access to the newest movies months before streaming subscription services and daily prices that are still lower than Video On Demand," said J. Scott Di Valerio, Outerwall's chief executive officer. "The pricing adjustments announced today will allow Redbox to continue to offer consumers high quality movies and games while making investments to enhance the customer experience."
The price hikes might also be a partial result of renewed agreements with several different movie studios such as Paramount Pictures and Lions Gate Entertainment Corp.
"This is only our second price increase in 12 years, and the first for Blu-ray discs and games, so you can be sure that we made this decision very carefully," Redbox stated in an email. "We know that hearing about a price increase isn't the best news, but we feel it's necessary in order to improve your Redbox experience, while continuing to deliver the best value for new movies and games."
Redbox's pitch that the price hikes aren't for naught is that it will allow the company to offer more personalized recommendations and deals while improving the overall Redbox experience. The company is likely referring to investments it's making into a more sophisticated recommendations engine that would be on par with the one Netflix uses. However, the company has to tread lightly when it comes to price increases.
Low pricing has been the main draw of Redbox, which originally offered DVD rentals for $1 per night before bumping it up to $1.20 in 2011. At the same time, Redbox has to contend with declining revenue, which dropped 5 percent to $1.4 billion in the nine month period ended in September.
Parent company Outerwall chimed in on the announcement.
"With new-release movies for $1.50 a day, Redbox remains the best value in new-release home entertainment. Consumers can continue to expect access to the newest movies months before streaming subscription services and daily prices that are still lower than Video On Demand," said J. Scott Di Valerio, Outerwall's chief executive officer. "The pricing adjustments announced today will allow Redbox to continue to offer consumers high quality movies and games while making investments to enhance the customer experience."
The price hikes might also be a partial result of renewed agreements with several different movie studios such as Paramount Pictures and Lions Gate Entertainment Corp.
