Do You Use Redbox? Get Ready for a Rate Increase…
- Posted on October 28, 2011 at 2:50pm by
Becket Adams
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Netflix stock quote as of Oct. 27, 2011
Netflix CEO Reed Hastings is likely to become an infamous case study.
His name is already being associated with lessons in how to kill a brand completely (if that‘s what you’re actually trying to do).
The trouble began when Netflix implemented price hikes that resulted in an enormous number of subscribers abandoning the brand.
Couple that with Hasting’s awkward blog apology and the announcement that they were going to separate services (only to change their minds later) and the end result has a downward spiral of their stocks into “bottoming-out” territory.
So you think competitors like Redbox would be taking notes, right?
Apparently not.
The rental kiosk company is raising the per-night price of a DVD rental from $1 to $1.20, Mashable reports.
Ironically enough, the announced price hikes will take effect on Halloween.
“This marks the first price increase for a Redbox standard-definition DVD rental in eight years,” said Paul Davis, CEO of Redbox parent firm Coinstar.
Blu-Ray and video game prices will remain the same. In its quarterly report, Redbox said its earnings had almost doubled with almost $1 billion in sales, the AP reports.
According to the Redbox CEO, higher operating costs prompted the price increase. Redbox is also reportedly planning its first national ad campaign, though the company says no announcements have been made on that front, writes Matt Cantor of Newser.
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Comments (49)
FreedomIQ
Posted on October 28, 2011 at 9:31pmMore reason to dump the product. Netflix won’t recover until they get a clue and bring their prices down…nor should they recover. This was arrogance. They ignored the customer. They deserve to fail. It is a great product that has gotten too big for its britches.
Redbox needs to fail now too. Simple.
Report Post »theaveng
Posted on October 29, 2011 at 12:10amI look at that stock and see a buying opportunity. Netflix and their streaming movies isn’t going away any time soon.
Report Post »BigSky
Posted on October 29, 2011 at 7:08amThe future is in streaming content anyway, so I don‘t see Redbox surviving beyond the demise of DVD’s and Blu-Ray.
Report Post »LinkedIn G
Posted on October 29, 2011 at 2:22pmKeeping physical media around vs. streaming media will only prolong the inevitable. Once people understand … rejection of physical media will bring the price down on streaming new release movies … we will be where we should have been before Netflix caved in to their stubborn old school fanbase. Holding a DVD in your hand is a thing of the past. Sooner or later it will be all streaming.
Report Post »kralspaces
Posted on October 28, 2011 at 9:22pmI just hope YouTube doesn’t raise their prices.
Report Post »cobra two
Posted on October 28, 2011 at 8:50pmIt never ceases to amaze me to see idiots waste time standing in line at a vending machine to purchase the crap that hollywood puts out that they call movies. Then to waste another few hours sitting in front of their big screen TVs watching it if they can pay attention between texting or letting
Report Post »the world know what they are doing every few minutes on their facebook pages.
Yep..ask the average person in line at the red box who the vice president is and they dont have a clue. But bet your ass they know what the best movie to rent that night is. Sad but true.
asybot12
Posted on October 29, 2011 at 2:18amHey they will probably pick the guy on the west wing!!
Report Post »jackc21
Posted on October 28, 2011 at 6:06pmnetflix will recover. We enjoy streaming and dvd so much that we weren’t using our cable anymore. We canceled brighthouse tv service and stopped using redbox – got tired of waiting in line to pick a movie or drop off. Saving over $100 per month and never leave the house to get movies. watch favorite shows on hulu and have found all sorts of treasures I never knew about on streaming.
Who needs regular tv or redbox? Netflix is a steal at $20 per month.
Report Post »asybot12
Posted on October 29, 2011 at 2:17amyou have a simple problem . The same denial was alive and well just before the Titanic went down and just for your info Dicrapicio (or what ever his name is) was not on it.
Report Post »types_zane
Posted on October 28, 2011 at 5:18pmWhen I got their email last night, I called them and told them they will be going the same way Netflix did; out of my house. I use redbox 3-5 times a week (substantially more since I don’t use Netflix anymore), but I have a blockbuster down the street. I can get unlimited DVD exchanges, no daily charge, larger selection at their store, and quicker release dates… I’ll take my hard earned 20 cents somewhere else. Those that say 20 cents is not a huge deal are correct on a front that in the grand scheme of your day 20 cents is not much, however cost per unit a 20 cent increase is 20% and typically if I were getting any more enjoyment out of a product I would have no problem coughing up the money, but its still just a DVD. So if your insurance company was doing well financially and increased your rates 20% would you stick with them or use a cheaper carrier, after all insurance is insurance (for the most part). If your city raised the fine for speeding 20% would that too be ok? I’ll stand by my word and stop using them unless they revert their course of action.
Report Post »kangaroo
Posted on October 28, 2011 at 4:41pmI think netflix took a dive because the CEO told obloodyliar that yea raise my taxes I want to pay more. (flippin twit) Some radio talk show hosts went nuclear at the time over it, and went as far to say they are canceling their subscription.
Report Post »FidFed
Posted on October 28, 2011 at 4:36pm“This marks the first price increase for a Redbox standard-definition DVD rental in eight years,”
Report Post »They are such liars.. they tried about 12 months ago and failed.. Guess what there are others like
Blockbuster that rents for a $1.00 so I will start using them again.
Redbox said its earnings had almost doubled with almost $1 billion in sales this past year, and they want more?
NEAF
Posted on October 28, 2011 at 7:10pm$1billion in sales (gross), how much are profits? That is the real question.
Report Post »SMALLRGOVTNOW
Posted on October 28, 2011 at 7:54pmIf their earnings almost DOUBLED, then their PROFITS must have increased substantially also. They are raising prices b/c Netflix raised theirs. With all the backlash Netflix got, they think people will think REDBOX is still a better deal. Smacks of greed io me. Never enough . . .
Report Post »Rodney
Posted on October 28, 2011 at 4:26pmReally don’t get all the hostility pointed at Netflix. They even backed down off what they were gonna do. I don’t see how Redbox is a better deal. Someone please explain it to me. $1 per night for one movie (DVD) versus $8 per month for a bunch of movies (streaming). I hated getting the 1 DVD in the mail from Netflix but I understand some people only do DVD’s. Streaming movies is much more convienent than driving out to some drop box location. Why the hate?
Report Post »Mrs. Bowers
Posted on October 28, 2011 at 4:23pmI’ll pay $1.20 to rent a movie. Still beats the old video store pricing.
Report Post »Common.Cents
Posted on October 28, 2011 at 7:47pmBlockbuster is 1.00. And i think 7.99 monthly for unlimited exchanges.
Report Post »mattmo79
Posted on October 29, 2011 at 12:42amGood luck finding a Blockbuster store anywhere. The Blockbuster kiosk charges $2.99 for a new release and $1.00 for the older releases. The kiosks are not associated with Blockbuster other than licensing the brand name.
Report Post »Rodney
Posted on October 28, 2011 at 4:15pmStill love netflix over Redbox. For $8 per month I can watch thousands of movies versus paying $1 per movie through Redbox. I don’t get the appeal.
Report Post »kangaroo
Posted on October 28, 2011 at 4:14pmYep I got that notice in my mail yesterday, and guessed they were going to raise the price before I opened it. What got me though, and I’m not that smart, was their reason, and that was because of the debt card increase charges, now correct me if I am wrong, I thought the grubment stepped in and gave the vendor a break which lead the banks like BOA to raise their debt card prices for usage to 5 bucks a month on your bank charges. Just sayin
Report Post »parkrome79
Posted on October 28, 2011 at 4:05pmRedbox had the cost of customers who use debit cards for rentals go up thanks to the Durbin Amendment. The cost of using a debit card to the merchant for a $1 purchase went up about
Report Post »15 cents per transaction for most transactions. Redbox either absorbs it or passes it along.
Thanks to Dick Durbin.
mcmeador
Posted on October 29, 2011 at 12:22pmI thought the Durbin Amendment capped the amount that banks could charge merchants for processing their cards. In other words, I thought merchants were charged less now for processing debit card transactions, which is why banks are implementing or considering implementing debit card fees to make up for this lost revenue.
Report Post »parkrome79
Posted on October 29, 2011 at 1:39pmDebit card fees were lowered for larger item purchases. They were in fact raised for small ticket purchases like Redbox rentals for $1. The ‘cents’ part of the interchange bank charges were raised significantly while the “discount” (percentage) part of the fees were lowered. That raises fees for small ticket items. I handle credit card processing. All in this business are aware of this. Durbin did not account for this with his amendment, any version considered.
Report Post »gmoneytx
Posted on October 28, 2011 at 3:51pmand I still will use redbox, netflix lost us a while ago.
Report Post »scjeff
Posted on October 28, 2011 at 3:39pmJust like tax increases, the net result is not going to make them happy. Some folks will stop using them and others will rent less. Their profits will slide down and, you guessed it, their costs per rental will increase which will make them increase their prices again. Circular references are fun.
Report Post »I.Gaspar
Posted on October 28, 2011 at 3:38pmNo big deal. Everything has gone up.
Report Post »But why is it ironic that the price is going up on Halloween? (”Ironically enough, the announced price hikes will take effect on Halloween”)
SanDiego
Posted on October 28, 2011 at 5:32pmMaybe the author is related to Alanis Morrisette.
Report Post »mcmeador
Posted on October 29, 2011 at 12:18pmMy question exactly…lol.
Report Post »CatB
Posted on October 28, 2011 at 3:34pmI just bought a ROKU box for my bedroom tv (I only have it hooked up to my antenna) going to see what it offers and of course I can watch ((GBTV on it.
TEA!
I still think $1.20 is a good deal to see a movie .. but then you have to add in the gas unless you were going there anyway.
Report Post »Rowgue
Posted on October 28, 2011 at 3:33pmRedbox could increase their prices 5 fold and still be cheaper than any of their competition, so they aren’t going to lose any business over a 20% price increase on something that’s already dirt cheap.
The real problem with video rental services is that the service itself sucks. All of them suck. They succeeded in putting most traditional video stores out of business because they’re more convenient to use. But the problem is they didn’t replace the actual level of service offered at a conventional store. Conventional video stores carried almost every single movie as soon as they were available, and they got them long before they were available for sale to the general public. The new services never get half the movies that are released, and the ones they do get they don‘t offer until they’re already for sale to the general public. At that point you can go to your local library and get the movie for free and keep it for a week.
Report Post »MNH@wk
Posted on October 28, 2011 at 3:26pmNetflix will be a case study in what an absolute country of whiners America is turning into.
Report Post »CatB
Posted on October 28, 2011 at 3:34pmNo .. don’t mess with something that “an’t broke”.
TEA!
Report Post »SimpleTruths
Posted on October 28, 2011 at 3:37pmIf by “whining” you mean let the free market decide, then I guess are against free market principles. I think you just titled yourself a socialist.
Report Post »ares338
Posted on October 28, 2011 at 3:22pmI don’t rent movies. I borrow them from someone who buys them.
Report Post »sierrahiker
Posted on October 28, 2011 at 3:18pmSend the wall street group to Red Box headquarters
Report Post »TexasTBone
Posted on October 28, 2011 at 3:17pma 20 cent hike is not going to scare me away. it is still a great deal!
Report Post »FireWolf
Posted on October 28, 2011 at 3:37pmI agree, if it was a $2-5 jump, you could kiss that goodbye as well. Redbox performs a remarkable service even if they can’t stream it to my laptop.
Report Post »sierrahiker
Posted on October 28, 2011 at 3:17pmSend the wall street protesters to Red Box
Report Post »geonj
Posted on October 28, 2011 at 3:15pma 20% increase to cover “higher operating costs” from a company that doubled its earnings i a quarter. seems like bad business, but the marketplace will take care of it.
Report Post »AmericanStrega
Posted on October 28, 2011 at 3:13pmWe still use both DVD and streaming with NetFlix. We live in very rural Kansas and the closest RedBox is 26 miles from home. NetFlix is easier for us. And, if people don’t like the price hikes, vote with your dollars. The companies will either tell you to go pound sand or will change their ways to cater to their customers.
Report Post »FireWolf
Posted on October 28, 2011 at 3:41pmNetflix can go pound sand. It’s too bad you live that far away from a redbox, but you are probably ok with that.
You do what you can, as your situation dictates.
They (Netflix) can still go pound sand. ;)
Report Post »TheKingfish
Posted on October 28, 2011 at 3:13pmNetflix CEO Hastings is the Obama of the corporate world and both need to be thrown out by the stakeholders for dragging down the corporation and the country.
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