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Blockbuster Tests In-Store Kiosk Pricing

25 Feb, 2009 By: Erik Gruenwedel


Blockbuster has quietly begun experimenting with in-store rental prices on new releases aimed at the burgeoning DVD kiosk market.

According to sources at select store locations, pricing plans include $1.99 for a 24-hour window, with subsequent days priced at $1 per day. Customers would be billed upon the return of the title. Current in-store new release rental prices average about $5, and $4 for older titles with a seven-day grace period.

In December, Blockbuster CEO Jim Keyes said the chain would test prices as low as $1, which kiosk operators Redbox, The New Release, DVD Play and DVD Now currently maintain.

Randy Hargrove, spokesperson for the Dallas-based No. 1 DVD rental service, wouldn’t comment on specific pricing plans, which he said varied by market.

“We have been conducting local market tests across the country designed to give customers more choice, control and value,” Hargrove said. “Some tests include daily, weekly and monthly price options.  

One long-time Blockbuster analyst called the move “brilliant” and “about time.”

Edward Woo, research analyst with Wedbush Morgan Securities in Los Angeles, said the success of Redbox, including Coinstar Inc.’s recent ownership stake purchase from McDonald's, and other DVD kiosks underscore market demand for cost-effective movie rentals in the current economy.

“Blockbuster and Movie Gallery will need to address the value/convenience gap that Redbox and others offer,” Woo said.

Separately, Blockbuster said it would eliminate due dates for in-store DVD rental exchanges by Total Access members beginning March 2.

The Dallas-based No. 1 DVD rental service said all outstanding Total Access in-store rentals would be counted towards the quantity limits on members’ plans. Total Access allows members to rent online and return titles in-store for free exchanges.

“Once you've returned your in-store exchange, we'll then ship you the next available movie in your queue,” Blockbuster said, in a statement.

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