Apparently, the $1.00 a night price wasn't as essential as it seemed.
Back in October of last year, Redbox announced that it would be raising the price of rentals across the board. Instead of the $1.00 a night that the kiosks became known for, DVD rental went up to $1.20 a night. It seemed like a risky move, but apparently it didn't bother customers a bit.
A statement from Coinstar says that there was increased demand for rentals in February and March of this year, "reflecting, in part, better-than-anticipated consumer acceptance of the price increase for Redbox standard-definition DVD rentals."
Source: Home Media Magazine