Blockbuster to Abandon Revenue Sharing

Discussion in 'Archived Threads 2001-2004' started by Michael*K, Jul 25, 2001.

  1. Michael*K

    Michael*K Screenwriter

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    According to today's Variety, Blockbuster will begin abandoning revenue sharing agreements with studios as the contracts come up.
    Unfortunately, one of the consequences of this may be for studios to raise the wholesale and retail costs of DVD's in order to make up revenue from lost VHS sales and rentals.
    Here's the link to the article:
    Blockbuster Abandons Revenue Sharing
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  2. Glenn Overholt

    Glenn Overholt Producer

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    No, I refuse to read that article, as it goes against too many other threads. That would be like shooting themselves in the foot, so to speak, wouldn't it?
    Glenn
     
  3. Michael*K

    Michael*K Screenwriter

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    Well, you should read the article. Blockbuster's position is that DVD revenue is increasing exponentially over VHS and they can turn more profit from DVD rentals (which aren't covered under their revenue sharing deals) than with VHS.
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  4. Glenn Overholt

    Glenn Overholt Producer

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    Just kidding about not reading it, but I still think that they are playing with fire. If they cancel existing VHS rental contracts, then the studios will raise their prices when they sell them to BB. They will go up for the consumer as well.
    The same would go for DVD, except the DVD's are not as rugged as VHS tapes. There are going to be many more pissed off customers bringing the DVD's back and saying that they won't play because of this huge scratch on it! - I can see BB charging the previous customer for the selling price of the DVD. Yeah, we'll like that!!
    Wouldn't you love to get one of those in the mail, and of course, we'll have to toss in here that some players will not play some disks, so they could be returned in perfectly good condition.
    Also, if they do pull this off, it will put the final nail in the coffin for the two-tier pricing structure, but the studios will probably flip BB 'the bird', saying that hey, we're not getting any money back on this, so screw all of you! $50 - $80 for a new release could easily become the norm.
    Glenn
     

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