Redbox raising DVD rental prices 20%

The days of $1 DVD rentals may be nearing an end. Beginning Monday, Redbox kiosks will raise prices from $1 to $1.20 for a nightly rental. Redbox’s owner, Bellevue, Wash.-based Coinstar Inc., says it’s raising prices to help offset higher expenses for DVDs and processing debit card transactions. In doing so, however, analysts say it’s risking a customer backlash similar to Netflix’s recent loss of 800,000 U.S. subscribers when it increased prices by as much as 60% for its DVD-by-mail and streaming services. According to Coinstar’s latest quarterly report, published Thursday, the company’s earnings nearly doubled, largely because of robust growth at Redbox’s more than 34,000 rental kiosks. Redbox prices will remain unchanged for Blu-ray discs, at $1.50 per day, and video games, at $2 per day. Unlike Netflix, Redbox tested the price increases in several cities during the past year to see how they would change rental patterns. Management concluded there only would be a slight drop-off in DVD rentals. “We didn’t take this lightly,” Coinstar CEO Paul Davis told The Associated Press. Blockbuster Express rental kiosks still charge $1 per night for most movies, but those on its “hot list” now go for $2.99. Read more about Coinstar’s latest earnings report and its decision to raise prices here.