Bah humbug: Redbox jacks rental prices by up to 50 percent

Redbox

After the Netflix-like Redbox Instant streaming service landed with a resounding thud in 2013, Redbox is looking to boost its sagging revenues the old-fashioned way—by charging more money to rent discs.

Redbox’s DVD rental prices are increasing by a full 25 percent on December 2, as the Wall Street Journal first reported. DVD rental prices are increasing from $1.20 to $1.50 per night. Other rental types are being jacked by even higher percentages, with Blu-ray disc rentals going from $1.50 to $2 and video-game rentals increasing from $2 to $3 per night. (The game-rentals price increase goes into effect in January.)

How's that for handing out a lump of coal just in time for Christmas? But it’s not like fans of physical discs have many spur-of-the-moment rental options; Blockbuster closed its doors late last year after Netflix (and yes, Redbox) devastated its business model. And to be fair, Redbox's new prices are still pretty compelling compared to a day-one digital rental for a new release, which normally costs in the neighborhood of $5 on Amazon Instant Video or iTunes.

On the plus side, a few perks are coming to Redbox kiosks in the coming months. The company plans to introduce a Netflix-like “recommendation engine” based on your rental history, and it promises to stock kiosks more efficiently—though that could actually mean bad things for frequent users if it translates into “stuff the kiosks with new releases and neglect back-catelog titles.”

The story behind the story: Though Redbox hasn’t raised its prices since 2011, don’t be surprised if we see yet another price increase before long. Now that it’s succeeded in eliminating Blockbuster, Redbox is having a difficult time expanding its business beyond dirt-cheap disc rentals.

As mentioned, Redbox Instant died an inglorious death earlier this year after the consumer response to its tepid selection was, well, just as tepid. Worse for Redbox, its now-ubiquitous kiosks seem to have hit the saturation point; the WSJ notes that Redbox will actually have 100 fewer kiosks at the end of 2014 compared to its 2013 total.

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