Redbox tinkers with higher prices, tries $2 first-night rentals in PA

Known far and wide for its $1-a-night DVD rentals, the red-hot kiosk company is reportedly testing some new—and higher—pricing schemes, including $2 first-night rentals in one market and $1.50/night rentals in another.

Video Business reports that Redbox is following through with an earlier promise to try out some "different DVD pricing models," starting in a pair of markets: Harrisburg, Penn., and Albuquerque, New Mexico.

So here's the deal, according to Video Business: In Harrisburg, Redbox kiosk rentals will now cost you two bucks for the first night, then a buck a night (as usual) after that. For those of you in Albuquerque, rental prices are going up to $1.50 a night, period.

It's not clear for how long these pilot programs will last, or if (and when) they'll spread to other markets. I've reached out to Redbox corporate for answers to those questions.

With more than 18,000 kiosk locations coast-to-coast, Redbox has become incredibly popular thanks (in part, anyway) to its cheap, ever-so-simple pricing policy: DVD rentals for a buck a night, including the latest releases.

Of course, that policy has also gotten Redbox in hot water with some Hollywood studio executives, who feel that their new release DVDs are being "devalued" at $1 a night. Redbox has filed lawsuits against three movie studios—Universal, Fox, and Warner Brothers—who are refusing to distribute wholesale DVDs to Redbox until a month or so after they go on sale in retail stores.

So here's the question: Why is Redbox thinking about raising its prices? Is it bowing to pressure from the suits in Hollywood, who don't like the idea of "Transformers: Revenge of the Fallen" renting for just a buck a night as a new release? Is Redbox simply looking for a "bigger revenue stream," as they say in homevid circles? Questions, questions.

While we wait for some answers, I have a question for you Redbox aficionados out there: Would you keep renting movies from the big red kiosks if Redbox raised its DVD rental prices for $2 for the first night, or $1.50 every night?

Update: I just heard back from Redbox's PR department with answers to some of my questions ...

Q: Any idea how long these pilot programs will last?
A: No definitive end date has been set. We plan to continue the test until we can understand the implications.

Q: Could these pilot programs spread to other markets?
A: Currently, Redbox does not have plans to expand the test or to make any permanent price changes.

Q: Loyal Redboxers will be understandably upset at the prospect of higher rental prices. Should they be worried?
A: Consumer response is a key element of the test. Our customers are our first priority.

Q: Are these tests in any way related to the demands from studios that Redbox charge higher prices for their new DVD releases, i.e. is Redbox bowing to pressure from Hollywood?
A: Redbox conducts tests on an ongoing basis as part of our regular course of business. We currently have no plans to permanently change our pricing.

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Redbox tests higher prices [Video Business]