BELLEVUE, WA -- Coinstar Inc. announced this week that it's raising DVD-rental fees at its Redbox kiosks to $1.20 from the $1-a-day rate it's charged for the past eight years.
Coinstar chief executive Paul Davis said the 20% price hike, which kicks in on Nov. 1, will help offset costs associated with rising operating expenses, including the recent increase in debit card interchange fees for small-ticket transactions resulting from the Durbin Amendment. | SEE STORY
Redbox said prices for Blu-ray movies and videogames will remain at $1.50 and $2 per day, respectively.
Meanwhile Coinstar's third quarter results exceeded Wall Street estimates as former Netflix customers, disgruntled by a 60% price hike for the video subscription service that began Sept. 1, flocked to Coinstar's $1-a-day Redbox kiosks.
Coinstar's profit soared 90% to $37 million, or $1.18 per share, in the three months ending in September, up from $19.5 million, or 60¢ a share a year earlier. Revenue rose 23% to $466 million. Wall Street had estimated third-quarter earnings of 88¢ a share on revenues of $433 million.
Coinstar ended the quarter with 34,400 Redbox DVD kiosks and 19,500 coin-counting kiosks on location. Redbox revenue climbed 28% in the quarter to $390 million, while the company's coin business accounted for $76 million.
