The increase, which goes into effect Oct. 31, is only from $1 per day to $1.20. Prices for Blu-ray rentals and game rentals will stay at $1.50 and $2, respectively. "This marks the first price increase for a Redbox standard-definition DVD rental in eight years," Paul Davis, CEO of Coinstar said in a press release. Davis went on to blame increased operating expenses, including recent increases in debit card interchange fees. Redbox has posted more than $1 billion in sales so far this year. However, some of the money will likely go towards Redbox's first national brand advertising campaign, according to Advertising Age. A Redbox rep, however, says plans for such a campaign have not been announced.
Though the price increase was slight, it was enough to send parent company Coinstar's stock down 11% in after-hours trading. One likely reason is the recent memory of Netflix's disastrous experience with a 60% price increase that went into effect in September and has contributed to the company's fall from grace. At least one analyst believed the move had benefited Redbox, as consumers canceled their Netflix accounts and sought out Redbox as an alternative.