Redbox Company

Redbox is expanding into video game rentals as its parent company reported improved financial performance for the first quarter. The kiosk DVD rental company said that after testing video game rentals for nearly two years, it will on June 17 begin offering titles such as Call of Duty and Super Mario Galaxy in more than 21,000 of its 31,800 locations around the country. Games will cost $2 per night, compared to $1 for DVDs and $1.50 for Blu-ray discs. In a conference call Thursday with analysts, Paul David, chief executive of Redbox parent company Coinstar Inc., said tests have indicated that the company can increase revenue by replacing 10% to 15% of the DVD slots in its kiosks with games.

Say goodbye to $1-per-night DVD rentals. Kiosk rental company Redbox said Thursday it is raising its standard price to $1.20 a day to cope with rising costs. Blu-ray disc rentals will cost $2 a day, up from from $1.50. The company's first price increase since it launched eight years ago comes as Redbox reported strong results for its third quarter ended Sept. 30, possibly fueled by the gaffes of its primary competitor, subscription service Netflix. Redbox revenue during the quarter jumped 28% from a year earlier to $389.8 million, while operating income rose 56% to $83.5 million.

Redbox is hooking up with Verizon Communications Inc. as part of a major step forward to compete with Netflix Inc. in both the digital and physical worlds. The company famous for its ubiquitous red DVD rentals kiosks announced Monday that it would form a joint venture with telecom giant Verizon to create an online movie subscription service. Redbox also agreed to spend up to $100 million to acquire the Blockbuster-branded DVD kiosks operated by NCR Corp., its largest competitor in that business, adding about 9,000 machines to its existing base of 35,400.

An unprecedented round of online price cutting for DVDs started Thursday that could provide a much needed boost for the beleaguered home entertainment industry. Walmart on Thursday slashed the price of its 10 most popular DVDs that will be released soon, including "Star Trek," "Night at the Museum: Battle of the Smithsonian" and "Harry Potter and the Half-Blood Prince" to $10, less than it has charged for highly anticipated new movies in recent years. Target immediately announced that it would match Walmart's price.

For those who like renting movies, Hollywood may soon have a message: Prepare to wait. In an effort to push consumers toward buying more movies, some major film studios are considering a new policy that would block DVDs from being offered for rental until several weeks after going on sale. Under the plan, new DVD releases would be available on a purchase-only basis for a few weeks, after which time companies such as Blockbuster Inc. and Netflix Inc. would be allowed to rent the DVDs to their customers.

As more consumers leave DVDs behind for digital downloads, the company that brought movie vending machines to grocery stores nationwide is following the audience. Redbox on Thursday unveiled a new digital strategy that would expand the number of movies offered to consumers directly in their homes by next year, a move the Oakbrook Terrace, Ill., company hopes will set the stage for longer-term growth and soothe investors anxious about its prospects. The company is in talks with several potential partners for this expansion, which will include a Web-based service that works in conjunction with its $1-per-night movie kiosks, Chief Executive Mitch Lowe said.

Netflix won't have the online movie subscription business to itself for long. Two of the biggest players in DVD sales and rentals, kiosk company Redbox Automated Retail and online retailer Amazon.com Inc., have told Hollywood studios that they are looking to launch streaming movie services similar to the one offered by Netflix. Their interest comes in response to the rapid growth of Netflix over the last few years as many consumers are now paying a flat monthly fee to access thousands of movies, instead of paying separately for each film.