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Finding the Right Value for Video

4 Nov, 2011 By: Stephanie Prange

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The only thing that’s constant in the video rental business is change, and in the past few weeks that change has accelerated again.

While low-price leaders Redbox, Blockbuster Express and Netflix have begun to raise prices, Blockbuster is taking a page from the Netflix playbook and offering an in-store subscription program.

Dubbed Blockbuster Movie Combo, the new sub program allows users to rent one movie (DVD or Blu-ray Disc) or video game at a time in store with the option to order one by-mail rental per month with no due dates for $7.49 for the first month and $14.99 a month thereafter.

Meanwhile, the much-publicized and much-maligned Netflix price jump (for those who want both to rent physical discs and stream) has given kiosk companies Redbox and Blockbuster Express cover to raise their prices as well.
Redbox is upping its DVD rental price to $1.20 a night, from $1 (Blu-rays rentals are still $1.50 a night, and games, $2). Blockbuster Express has taken a slightly different tack, making new releases, many of which are not available at Redbox, $3 for the first night, with the older titles costing less and Blu-ray titles rented at a $1 a night premium on the DVD price.

Finally, rental dealers have stopped devaluing content, which should please their studio suppliers. No longer, thanks to windows and increased pricing, will a customer see the same new release sold for $16 or more at Walmart available for rent for $1 at a Redbox kiosk. With the new pricing structure from Blockbuster Express, customers will again begin to associate new-release rentals with a higher value. Over at Netflix, streaming isn’t just a value-added freebie; it has a cost associated with it.

While the studios have not always embraced the rental business, recent pricing changes are certain to cheer executives who have tried to stave off the devaluation of their home entertainment product — and of content in general. That, along with the stabilization of the business as evidenced by the Q3 numbers from DEG: The Digital Entertainment Group, should make for a merrier holidays.

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