Blockbuster tests 99¢ DVD rentals

UPDATE: Low price will apply to some older, catalog films

By Danny King -- Video Business, 12/5/2008

DEC. 8 | In an effort to improve holiday store traffic, Blockbuster has cut the rental prices of some of its older DVD titles to as little as 99¢ a day, about the same price as movie rentals from kiosk operators such as Redbox.

The largest U.S. movie-rental chain is testing the price cuts for so-called "classic" titles in "some markets," Blockbuster spokesman Randy Hargrove said.

CEO James Keyes said Blockbuster is pricing "thousands" of older titles at 99¢, marking the first time the company has charged so little for a video rental, Reuters reported last week.

Hargrove decline to specify how many stores would have the cheaper titles or how long the promotion would last.

The test marks a reversal of sorts from the company's efforts to offset the effects of less foot traffic by charging more for its DVD rentals. Last month, Blockbuster cut its third-quarter loss by 48% from a year earlier partially by boosting both revenue per customer visit and net rental rates by at least 15%.

The price cut also might be part of an effort to stave off competition from operators of kiosks, which are expected to boost their share of the market place as chains such as Blockbuster and Movie Gallery shrink the number of stores they operate. At 99¢, Blockbuster's pricing on some older titles is about equal to what Redbox and smaller competitors TNR/Moviecube and DVDPlay are charging for more contemporary movies.

DVDPlay in October dropped the price of its standard-definition and Blu-ray Disc rentals to $1 a night from $1.49 a night, while Redbox last month started stocking Blu-ray discs, also with a $1 rental price, at some locations.