Redbox pushing price increase ahead of holidays

Redbox is raising its prices in an effort to boost stagnant sales and get more revenue out of its existing customers.

Outerwall, the parent company of Redbox, has announced that the price of a movie rental is going up 25% at its 40,000 kiosks across the United States starting Dec. 2. The company said the daily rental rate for DVDs will go from $1.20 to $1.50 and its fee for Blu-ray rentals will go from $1.50 to $2 beginning Dec. 2. Beginning Jan. 6 the company will raise its daily video game rental fee from $2 to $3. Outerwall selected the price points after several months of market testing.

"With new-release movies for $1.50 a day, Redbox remains the best value in new-release home entertainment. Consumers can continue to expect access to the newest movies months before streaming subscription services and daily prices that are still lower than Video On Demand," said J. Scott Di Valerio, Outerwall's chief executive officer. "The pricing adjustments announced today will allow Redbox to continue to offer consumers high quality movies and games while making investments to enhance the customer experience."

In the third quarter Redbox’s revenue dropped 5% to $1.4 billion and operating income fell 9% to $153.2 million. Same-store sales fell nearly 12%. In addition to increasing competition from streaming services like Netflix, Redbox has run out of new locations to install kiosks and expects to end the year with 100 to 400 fewer kiosks in the United States and Canada than it had in 2013.

"Today's announcement represents the first time Redbox has raised prices on Blu-ray discs and video games and only the second time in more than 12 years that we've raised prices on DVDs," Di Valerio said. "We look forward to continuing to provide consumers with tremendous access to the new-release movies and games they love in the formats they want."