Per Inside Redbox:
Several commenters on this site have claimed recently that Redbox kiosks in their areas have been charging more than $1 per night for rentals. The kiosk vendor confirmed yesterday that it is currently testing two different pricing models, one in Albuquerque, New Mexico and one in Harrisburg, Pennsylvania. Kiosks in Albuquerque are charging $1.50 per night, and Harrisburg machines are charging $2 for the first night, with the customary $1 per night charge for additional nights. The higher test prices are for both new releases and catalog titles in both areas.
These tests support Coinstar CEO Paul Davis’ comments last month that at least some Redbox kiosks had software installed that would allow variable pricing.
Our old friend, Merriman Curhan Ford analyst Eric Wold, feels that even if higher rental prices became permanent, Redbox would not lose many customers.
“I still believe consumers will view the value and convenience of Redbox for the immediate gratification of a DVD rental as superior to the other rental options out there. . . Personally, I’m a little concerned about the negative impact to the ‘$1 per day’ marketing message that is now so widely associated with the Redbox brand. . . However, if Redbox is able to push through a higher price point without negatively impacting the brand or traffic/usage to any great degree, then the positive benefit to margins could be substantial.”
Wold also feels that if they are successful, higher pricing models may be just the sort of compromise studios are looking for in their battle with Redbox. Either way, Wold thinks that higher prices would have a positive effect for Redbox because they would help offset the increased costs incurred by the company when it acquires titles from retail channels.
Is this limited, higher pricing test going to come and go without lasting effect, or is this the beginning of the end for $1 per night Redbox rentals? If higher prices become the norm at kiosks nationwide, will it affect your Redbox habits? Let us know in the comments.
Several commenters on this site have claimed recently that Redbox kiosks in their areas have been charging more than $1 per night for rentals. The kiosk vendor confirmed yesterday that it is currently testing two different pricing models, one in Albuquerque, New Mexico and one in Harrisburg, Pennsylvania. Kiosks in Albuquerque are charging $1.50 per night, and Harrisburg machines are charging $2 for the first night, with the customary $1 per night charge for additional nights. The higher test prices are for both new releases and catalog titles in both areas.
These tests support Coinstar CEO Paul Davis’ comments last month that at least some Redbox kiosks had software installed that would allow variable pricing.
Our old friend, Merriman Curhan Ford analyst Eric Wold, feels that even if higher rental prices became permanent, Redbox would not lose many customers.
“I still believe consumers will view the value and convenience of Redbox for the immediate gratification of a DVD rental as superior to the other rental options out there. . . Personally, I’m a little concerned about the negative impact to the ‘$1 per day’ marketing message that is now so widely associated with the Redbox brand. . . However, if Redbox is able to push through a higher price point without negatively impacting the brand or traffic/usage to any great degree, then the positive benefit to margins could be substantial.”
Wold also feels that if they are successful, higher pricing models may be just the sort of compromise studios are looking for in their battle with Redbox. Either way, Wold thinks that higher prices would have a positive effect for Redbox because they would help offset the increased costs incurred by the company when it acquires titles from retail channels.
Is this limited, higher pricing test going to come and go without lasting effect, or is this the beginning of the end for $1 per night Redbox rentals? If higher prices become the norm at kiosks nationwide, will it affect your Redbox habits? Let us know in the comments.
