Well, this seems like poor timing. Consumers are still steaming about the recent changes at Netflix. Now, they have something else to gripe about: Redbox.
On Thursday, Redbox announced plans to raise its rental prices to $1.20 per DVD, per night. The new pricing structure will go into effect on Monday, October 31, 2011.
Redbox sent an email out to users on Thursday night, saying that the price increase was due to rising operating expenses, including higher debit card fees that went into effect on October 1. A slight saving grace is that the cost for Blu-ray and gaming rentals will remain $1.50 and $2 per day, respectively.
Some of those other operating expenses could have to do with the company's plan to launch its own digital streaming service. According to Deadline.com, those wheels are already in motion, since Redbox plans to launch the service by the end of this year.
While there's no further info about the streaming endeavor just yet, we do know about the rental prices. Yes, it's really only a 20-cent increase. However, it's also a 20-percent increase -- and Redbox users aren't happy about it.
At last peek, the company's Facebook page had over 2,300 comments weighing in on the issue. To be fair, not all of them are negative. That said, does anyone really enjoy a price increase?
However, there isn't just a bit of backlash from the public. The stock for Coinstar, Redbox's parent company, dropped 10 percent in Friday's pre-market trading. According to Bloomberg, prices fell 8.5 percent to $48.45 this morning in New York. This is on top of a 2.3 percent drop at yesterday's close, following reports that movie studios were looking to put a 60-day delay on renting new releases.
Back in July, Netflix announced a 60-percent price hike, which included a plan to split disc rentals and streaming services. That left subscribers will higher fees for less services. The move resulted in a major backlash. Earlier this week, Netflix made its quarterly earnings public, which included a loss of approximately 800,000 subscribers.
"This is the first time in eight years Redbox has raised our daily DVD rental price," the company said in its email statement. To ease customers into the increase, Redbox will discount the first day of all online DVD rentals to $1.00 from October 31 through November 30. Additional rental days will be $1.20.
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