1 Comment

Summary:

Redbox is testing different, higher price points for DVD rentals in some markets, reports Video Business. The company has been a disruptor in the home video market with its low-cost, $1-a-night movie rentals. That price is so low that Redbox is embroiled in multiple legal battles […]

RedboxLogoRedbox is testing different, higher price points for DVD rentals in some markets, reports Video Business.

The company has been a disruptor in the home video market with its low-cost, $1-a-night movie rentals. That price is so low that Redbox is embroiled in multiple legal battles with Hollywood over access to DVDs.

But maybe Redbox thinks renting a movie is worth more than a buck a night. In Harrisburg, Penn., the company is charging $2 for first-night rentals ($1 for each night after) and in Albuquerque, NM, it’s testing a $1.50 nightly rate.

Coinstar, which owns Redbox, said in August that the company would try out different pricing, offer Blu-ray disc rentals and create videogame rental machines. Redbox has already started testing kiosks that sell DVDs.

Redbox has said in the past that though it charges just $1 a night for a DVD, it typically rents a DVD 15 times at an average of $2 per transaction.

Redbox has been growing like a weed and now has more than 17,000 locations across the country. Whether the company is buckling under industry pressure, fueling expansion or just wants to make more money, nudging the price up just seems so inelegant.

Part of the beauty of the Redbox value proposition is its simplicity. A dollar a night — boom! — done. Doubling it or adding in half dollars to the mix just mucks it up. Granted, since the kiosks work off credit cards, you won’t have to fumble for quarters, but the more you dumb it down (and the cheaper you make it), the more people will use it.

Sure, prices go up all the time for everything, but Redbox hasn’t been around that long, and its value message is just now taking hold.

You’re subscribed! If you like, you can update your settings

Related research

Subscriber Content

Subscriber content comes from Gigaom Research, bridging the gap between breaking news and long-tail research. Visit any of our reports to learn more and subscribe.

You're subscribed! If you like, you can update your settings

Related stories

  1. Redbox Q3 Revenue Up 90% Over Last Year Friday, November 6, 2009

    [...] has also started experimenting with higher rental prices in select markets, in a move that could be an olive branch to grumbling studios, or a way to [...]

Comments have been disabled for this post