Outerwall announced Monday it will be raising its Redbox DVD rental prices by 25 percent in an attempt to increase the company’s lackluster bottom line and perhaps assist in the company’s plight to invest in brand new technology.
As of Dec. 2, 2014, DVD rentals will go up from $1.20 to $1.50 per night. Blu-ray disc rentals will increase from $1.50 to $2 per night. Daily video game rentals will go higher from $2 to $3 beginning Jan. 6.
Moving forward, Redbox is a releasing a recommendation search engine akin to Netflix’s that many say has helped the video streaming services to become immensely successful. The purpose of the launch is to veer customers to certain films and television shows they are likely to enjoy.
If Outerwall is available to generate higher revenues, the company will invest in mobile technology and enhance its stocking of its grocery store and other retail kiosks.
“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,” said J. Scott Di Valerio, CEO of Outerwall, in a statement.
Although a substantial number of Internet consumers use Netflix, there is still a demand for Redbox, predominantly because of its low prices. However, industry experts say any increases for the company could diminish its business.
Nevertheless, the fee will continue to be cheaper than more than one-quarter of video-on-demand rentals that cost a minimum of $5 for new releases. Also, subscription-based streaming services mostly list older titles instead of newly released movies similar to Redbox.
“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,” said Di Valerio. “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.”
The company is expected to report the impact of the hikes in its next quarterly results.