Redbox Thinking About Jacking Up DVD Rental Rates?

Start-up companies who suddenly find themselves taking off are in an interesting position: maintain the status quo, or attempt to squeeze more out of their business model. Redbox is one of those services, and with 25,000 DVD kiosks now in service around America, things are reaching a critical mass. Thus far, the company has largely generated support by offering nightly DVD rentals at just $1/night, with online reservations making things even easier for consumers.

Recently, we heard that Redbox was considering a low-cost video streaming service, something that would more directly compete with Netflix's wildly popular "Watch Instantly" streaming feature, which is now available on Nintendo's Wii, Microsoft's Xbox 360 and Sony's PS3. But implementing such a service would be costly, and with people renting $1 DVDs at a rapid pace, it makes sense to think that Redbox might want to test the waters on the more expensive end somewhat.

According to a company representative, Redbox is currently "testing out" higher price points in various cities, with nightly rates ranging from $1.15 to $1.25 instead of the typical $1. There's obviously no mention of how long these "test rates" will simply be "tests," and if demand ceases to slow even at the higher price, you can almost bet that Redbox will roll these higher prices out to other cities.

Is the end of the $1/night DVD rental upon us? We sure hope not, but we wouldn't be surprised. The $1/night entry rate was a great way to break out in a crowded market place, but the time may finally be right to price things a bit higher if demand continues to skyrocket. Get the cheap ones while they last!
Tags:  DVD, Rental, kiosk, Redbox