Redbox Raising DVD Rental Rates By 25 Percent

SAN FRANCISCO (AP) - Redbox is raising its DVD rental prices by 25 percent in an effort to wring more revenue from the shrinking audience that still watches movies on discs rather than online.

The increase announced Monday means the price to check out a DVD from one of Redbox's nearly 44,000 in-store kiosks will increase from $1.20 per day to $1.50 effective Dec. 2. Redbox's Blu-Ray rental rates are increasing 33 percent, from $1.50 per day to $2.

Video game lovers will be even harder hit beginning Jan. 6. That's when Redbox will begin charging $3 per day to rent video games, a 50 percent increase from the current $2.

Investors are betting that most Redbox customers will shrug off the higher prices. The stock of Redbox's owner, Outerwall Inc., surged $7.83, 12 percent, to close Monday at $71.39 - the biggest one-day gain since February 2012.