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Universal to begin test charging more than $1 per night for DVD kiosk rentals

October 6, 2010 | 12:55 pm

BlockbusterKiosk Universal Pictures is putting the first crack in the wall of $1-per-night rentals of DVDs from kiosks.

The studio has signed a deal with NCR Corp., which operates nearly 7,000 kiosks under the Blockbuster Express name, that includes the first test of "premium" prices for select DVDs the same day they go on sale.

Universal is testing the waters to find out whether consumers would be willing to pay more for newly released DVDs rather than wait nearly a month to rent at a lower cost. If they are, it would alleviate studios' concerns that $1-per-night rentals undercut revenue by attracting consumers who might otherwise pay more to watch the DVD sooner.

Most other DVDs from Universal will still be available to rent for $1 per night 28 days after they first go on sale. It's the same "window" that Universal, 20th Century Fox and Warner Bros. have instituted on NCR's larger competitor, Redbox. They did so in an effort to boost DVD sales and video-on-demand rentals, believing that $1-per-night rentals of newly released DVDs would eat into sales, where profit margins are greater. 

As part of their deal, Universal and NCR have agreed to test charging more for certain titles in a small number of kiosks during the first 28 days. Under the tests, NCR is expected to charge a higher price, possibly $3, for the first night and a lower price, such as $2, for subsequent nights.

Then, after 28 days, those discs will revert to the standard $1-per-night price.

"Our agreement to test premium day-and-date offers and new DVD sales will help us identify new outlets for our movies while giving our customers the flexibility and choice they want in their entertainment purchases," Universal Home Entertainment President Craig Kornblau said in a statement.

It's the first time a major DVD kiosk rental company has charged more than $1 per night during a so-called premium window. Redbox charges $1.50 per night for high-definition Blu-ray discs and has tested going as high as $1.25 per night for standard DVDs.

The tests are expected to start soon, though an NCR spokesman declined to identify which movies would be tested and in what markets.

-- Ben Fritz

Photo: A Blockbuster Express DVD kiosk. Credit: NCR Corp.

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