New Credit Card Law May Result in Redbox Price Change

Posted Wed Sep 21, 2011 at 02:20 PM PDT by Dick Ward

Analyst Eric Wold says we may be looking at $1.25 in the near future.

When Redbox first came out with $1 movie rentals they also painted themselves into a bit of a corner. Any increase in pricing could really change things up for the company and eliminate the good will they've earned for their cheap pricing, not to mention a really nice tagline for kiosks.

A new law that's going into effect this October changes the way credit card companies charge stores for their services, which means they'll likely be passing the cost on to consumers. That means that instead of shelling out around five cents for each transaction, Redbox could end up paying 22 cents per.

Eric Wold notes that the average rental earns Redbox $2.20 and a quarter increase likely wouldn't change things significantly for the company. After what happened with Netflix, a price change may be more of a risky proposition than Wold suspects.

Source: Home Media Magazine

See what people are saying about this story in our forums area, or check out other recent discussions.

Tags: Industry Trends, Redbox (all tags)