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Redbox Raises Its Prices To $1.20 Per Day 232

Posted by samzenpus
from the those-who-don't-know-history dept.
nixkuroi writes "Redbox, apparently not having noticed the backlash against Netflix, has decided to charge its customers 20% more per day. Though there will be a discounted grace period for the first day of rental until Nov. 30 2011, the full pricing increase will kick into effect on December 1."
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Redbox Raises Its Prices To $1.20 Per Day

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  • by bill_mcgonigle (4333) * on Thursday October 27, 2011 @07:55PM (#37863032) Homepage Journal

    The price of everything else is up 20% in the past few years (other than salaries), so why not Redbox? Netflix raised their base price 60%, and fumbled with Qwickster - different story.

    It would be great if the value of the dollar were stable, but it's not, so prices rise. Thanks, Helicopter Ben.

    • The price of everything else is up 20% in the past few years (other than salaries), so why not Redbox? Netflix raised their base price 60%, and fumbled with Qwickster - different story.

      It would be great if the value of the dollar were stable, but it's not, so prices rise. Thanks, Helicopter Ben.

      Agreed. This is an example of a price being raised a small amount that won't affect the overall demand for the product (and yet isn't on a critical product or service that puts strain on a family's budget).

      Well played, Redbox, well played.

    • by fermion (181285)
      Netflix raised prices, but also gave customers an out if they were extremely sensitive to prices. One could go just streaming or just delivery and pay less. Netflix has understood that movie rental is extremely sensitive to pricing, and has done a ok job maintaining value.

      Redbox OTOH, now that it has banished most of the Blockbuster and all the Hollywood video stores, seems to be taking advantage of the situation. There is no acknowledgement that some customers might have trouble with the extra cents a

      • There is no acknowledgement that some customers might have trouble with the extra cents and have to cut back.

        That's implicit with every price rise, especially when costs are rising faster than salaries (yay, depressions).

        Redbox probably will do fewer rentals (though I guess less than 20%) but they can't operate at a loss either or there's no Redbox.

      • Oh in the inanity in your post.

        5 years it would have cost you $5 which was more in both absolute AND real dollars.

        Now it's a $1, going to $1.20, and you feel it's too much.

        The mind, it boggles.

      • Redbox OTOH, now that it has banished most of the Blockbuster and all the Hollywood video stores, seems to be taking advantage of the situation. There is no acknowledgement that some customers might have trouble with the extra cents and have to cut back.

        $DEITY forfend! Somebody might have to cut back from six movie rentals per week to five! Next thing you know, Redbox will be making its clients sell their children at discount prices just to heat their cardboard boxes!

        Perspective. Get some.

    • by tverbeek (457094)

      Netflix not only raised their prices more, they did so shortly after an earlier price increase, effectively doubling the rate in about a year.

      And then tried to spin it as "new lower prices".

      • by tbannist (230135)

        Not really. They actually said if you didn't use both services you could end up paying less, which is true. They tried to spin it as "what we need to do to continue offering high quality service to renters and streamers". However, it appears some people are more interested in being upset...

  • by JeremyMorgan (1428075) <jeremy.morgan@gmail. c o m> on Thursday October 27, 2011 @07:59PM (#37863064) Homepage

    Just like with Netflix, I understand there is a cost of doing business. The costs for these companies to pay for content is rising, and the means to deliver it is getting more expensive. I am willing to pay for it until it reaches a price I feel is too high, then I'm free to cancel. Why get angry?

    It's a luxury item, if you can't afford it don't do it. That simple.

    • That's not how supply and demand works. Prices are set to what will make the most money, NOT what will cover the costs.

      • Further, I don't see the costs for content rising given that they are a DVD rental business. There might be value in a partnership with the studios, but unlike Netflix and other streaming places, they don't need the studios to play ball so if costs rise from content issues they can tell the studios to take a hike and just keep buying and renting the DVDs.

        That's not to say the GP's main point isn't correct. Don't like the price hike, spend your dollars elsewhere (or don't).

        • by grumling (94709)

          No, they can't just buy DVDs and rent them out. Back in the VHS days that was possible, but now there's a bunch of copyright laws that won't allow it. Depending on how the laws are interpreted, public libraries could be in violation.

          • No, first sale applies just fine to DVDs. I suppose there is a colorable argument that it wouldn't, but it's never been tried and might well fail.

            The reason that they do deals with studios however is 1) so that they can buy at a discount, and 2) so that they can buy discs early via a distributor so as to get them all loaded in machines in time for the day they hit the public market, as opposed to having to scramble to find a retailer that has umpty million discs, buy them, bring them back to a warehouse, op

          • by Rich0 (548339)

            Actually, Redbox used to do exactly that. In the beginning the studios hated them. I think Redbox ran on a franchise model where the local owner would run out to Walmart or whatever and buy umpteen copies of the latest release at 9AM and load them in their machine. Then they'd start paying people to buy just a few copies and load them in machines when Walmart decided to refuse to sell to them (basically adopting the same tactics as people buying pseudoephedrine).

            Eventually they worked out a deal and I th

    • by Joe Tie. (567096)
      Why get angry? If you're seeing anger it's just you reading emotion into it. People raise prices, people comment on that fact. You seem to be aiming for a world where nobody is ever allowed to voice opinion on anything or comment on their actions in relation to what's going on in the world.
      • by hjf (703092)

        You've never been to the netflix blog, haven't you?

        You can see some pretty angry comments there.

    • The problem with Netflix was that they tried to spin it as doing the customer a favor. If the email they sent me had said "Sorry Mr. Demonlapin, we have to raise prices because streaming bandwidth and streaming rights are costing us a lot of money" I'd have been perfectly satisfied - not happy, of course, I don't like a rise in rates, but satisfied. Instead they tried to tell me how they were going to save me $1 a month by taking away either streaming or the DVDs.
    • Price of content is rising? Since when? DVDs are cheaper than ever.

    • by Larryish (1215510)

      Anybody got a Demonoid invite?

    • by tombeard (126886)

      So exactly why would the cost of viewing Startrek 3 need to go up? Is it costing extra to maintain it?

  • Redbox realizes that there are few other options and since Netflix has raised prices they can get away with it too because there is nowhere else for customers to go.
  • by Mean Variance (913229) <mean.variance@gmail.com> on Thursday October 27, 2011 @08:12PM (#37863194)

    I don't see this as an inflation response, nor is it a fair comparison to Netflix. Redbox is a la carte. You subscribe to nothing. Use it a little, a lot, or not at all.

    As they built out their system $1 was a simple price point, easy to advertise and a good entry point. Now they have a business model and usage metrics. $1.20 is a price point that they probably think is sustainable and will generate revenue and profit.

    I like Redbox and probably use it 3-5 times a month. It's easy to grab something for the family and just as easy to return to about 10 different boxes within 2 miles of my home and shopping areas.

  • by Doofus (43075) on Thursday October 27, 2011 @08:23PM (#37863294)
    Redbox pricing change and Netflix erstwhile split are not really in the same league.

    Netflix customers would have had to pay two membership fees monthly with the new Qwikster arrangement, a 60% increase over the prior setup. The key here is that the "service" that customers were paying for and to which they were accustomed, was being substantially modified - into two new services.

    Redbox is simply raising their price, by a marginal $0.20 per rental. For heavy renters, this may be significant over the course of a month. But for most normal renters, this increase is tolerable.

    Even at one rental per day, the difference over a month is only $6. If this is too much for you, perhaps you shouldn't be renting 30 DVDs a month.
    • by AK Marc (707885)
      The Netflix "worst case" went up, but if you didn't use streaming before or after (the DVD delivery people think of with Netflix), then your costs went down, not up. It was a price drop, not an increase.
  • by Anonymous Coward on Thursday October 27, 2011 @08:53PM (#37863492)

    Panic over
    Nothing to see, here

  • by justin12345 (846440) on Thursday October 27, 2011 @10:59PM (#37864324)
    The Netflix exodus wasn't just because of the price increase. People understand price increases. It was about the non-chalent contempt that they showed their customers by wording their email "don't you dare complain, the increase is less then the cost of that fancy coffee you're sucking on". The price increase was of course a big factor, but compared to renting at Blockbuster in the 90s, even with the increase Netflix is a steal. The Quickster thing was just icing, the cake was baked and burned.

    It was the sort of dumbass move only someone with a job title that abbreviates to a three letter acronym could make. Speaking as the CEO of a small company, I'd say that the brass had their heads so far up their own asses that they honestly couldn't see what was going to happen. My advice: if you're the CEO, you owe it to the company to spend at least 3 hours a day doing customer service or tech support, so that you know what the people you are serving want. Even if you can't give it to them, you know what to shoot for. Otherwise, you can let a singe sentence slide (the latte thing in Netflix case) and ruin a business hundreds or thousands of people have worked tirelessly on.
    • by Rich0 (548339)

      Yup, I'm amazed at stupid things executives do because they are out of touch. I knew a guy who worked close to sales and they managed to work out a major deal to sell a ton of equipment to a major customer, which would also get them in the door for lots of repeat business down the road/etc. The thing was huge, and because the customer was happy with their products and services they didn't require competitive bids/etc on the deal.

      They sent the deal to their VP for approval/etc, and the VP decided that they

  • They did this where I live several months ago.

    LK

    • by pdhenry (671887)
      I agree. 2 or 3 years ago the local Redboxes raised their first night fee to $2. Then the Blockbuster Express kiosks came to town and the rate hike was rescinded.

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