As most local Blockbusters have shuttered their doors, you’ve probably picked up a Netflix subscription or Redbox habit if you like to rent films regularly.
Despite recent, massive subscriber losses, Netflix is still pretty popular. (Although losses were far higher than were projected even by Netflix itself.) And Redbox has been lucky to absorb much of Netflix’s overflow since the subscriber exodus began September 1st along with the nearly 60% price increase for some customers.
One might assume that since news of the Netflix backlash has dominated the streaming and DVD rental arena since the price hike, companies like Redbox might be wary about implementing similar increases. One might be wrong, however, as Redbox has announced a relatively significant price hike on regular rentals. While Blu-ray discs will remain priced at $1.50 and games at $2, rentals through the DVD kiosks will jump from a dollar to a buck twenty, Redbox has confirmed.
Parent company Coinstar’s CEO Paul Davis blamed increases in operating costs for the price hike:
“We remain committed to providing redbox consumers access to the latest movies at an incredible value. This marks the first price increase for a redbox standard definition DVD rental in eight years. The change is primarily due to the increase in operating expenses, including the recent increase in debit card interchange fees as a result of the Durbin Amendment.”
Although the increase may ultimately work in Redbox’s favor when mitigating costs, in the short term, stock in Coinstar has dropped 9% on news of the new pricing.