Ever heard of Redbox
? Probably so. It's the company who puts movie rental kiosks in various stores, giving customers the ability to rent their favorite new release DVD for just $1 per night. This, along with Netflix's cheap monthly rates, have seriously hurt Blockbuster
, and movie studios are concerned that they could be hurting the purchase of DVDs and Blu-ray films as well. Due to this, studios are putting a 28-day block on Netflix and Redbox, refusing to send them movies until they've been at Best Buy and Walmart for nearly a month.
The thought is that this will encourage more purchases, and people hate to wait for rentals to appear. But now, they're trying something else. Starting in four major cities, tests are underway that will put select new release DVDs into Blockbuster Express kiosks. These are basically like Redbox kiosks, but owned by Blockbuster instead of Coinstar. The price for having access to a 1-night rental before the 28-day window is up? $2.99. That's nearly three times the $1/night that Redbox charges, and also a 3x increase over what Blockbuster charges for slightly older titles.
The first two test titles are Inception from Warner Bros. and Knight and Day from 20th Century Fox. If this gains traction, the company may roll it out to even more cities and stores. But the question is this: will Redbox also be invited to the $2.99 party? Or would that destroy Redbox's image as the low-cost leader in nightly movie rentals?