Rental pricing...anyone else remember this as a threat?

Discussion in 'DVD' started by Tony Scello, Jul 2, 2004.

  1. Tony Scello

    Tony Scello Second Unit

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    Anyone else remember when rental pricing(extremely high pricing upon new movie release to encourage rentals for a given number of months/years before dropping the price for sell through)for DVD's seemed inevitable? Remember when many believed (as did I) that the studios would buckle under the strong-arm tactics of Blockbuster and other rental chains to sign rental agreements with them as was done with VHS?(didn't some studios even experiment with rental pricing in some regions outside region 1?) There was alot of uneasiness around these parts years ago concerning this issue. Now that DVD has exploded in terms of sales and profitability, rental pricing appears to be a dead issue for this format (thank goodness). Heck, now studios make more money through DVD sales than they make through the threatrical runs of many of their movies. It seems like studios can't wait to get their products out on disc for sale as soon as possible at reasonable (in some cases, falling) sell-through pricing. From what I've read, DVD is the "goose that laid the golden egg" for the the studios, currently, and have'nt read or heard of any studio even considering rental pricing agreements anymore. I guess, if it isn't broke...don't fix it as they say. Thoughts?
     
  2. chris_everett

    chris_everett Second Unit

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    Why let blockbuster have all the $$$ when you can keep it for yourself? Smartest thing the studios have done in years.
     
  3. Gary Seven

    Gary Seven Grand Poo Pah

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    I remember more than 20 years ago when the studios "rented" their movies to rental stores... before the likes of Blockbuster existsed. It was 10 dollars to rent one of these. Fortunately that business model died quickly.

    Then the studios issued these expensive movies that encouraged renting (these moves were 100 dollars a pop). Back then, the price of a rental was lowered to eventually two bucks. Since then the price of rentals have increased.

    Through the years and now with DVDs, the price of the movies have dropped considerably... priced to own. Unfortunately, Blockbuster and others of its ilk, have failed to adjust to the times, retaining their greedy price on rentals while DVDs spiraled down to priced to own. It's no wonder they're losing money and I hope they file for bankruptcy at some point (unlikely, but I can wish).

    If Blockbuster had any sense, they would revise their outdated business model and adjust to the market. Assuming they get their DVDs for a small pittance, considering the bulk in which they purchase, they should drop their rental to two bucks, which would encourage more volume renting. Renting four movies for 8 bucks is more reasonable than 20.
     
  4. Jeff D Han

    Jeff D Han Supporting Actor

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    All I have to say is let the franchise rental stores
    go belly-up. As long as there is a Netflix and other
    similar sites, I no longer have any use for Blockbuster,
    Hollywood Video, etc.
     
  5. CraigF

    CraigF Cinematographer

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    Blockbuster hasn't made money since DVD came out...they've been losing money continuously since '97. The last I read, they make around 30% of their revenue from late fees. I think this defines the problem: people have decided they want to get a movie so they can watch exactly when they want or can. As allowed by the online rental places. But if Bb did that, and lost all those late fees, it would be guaranteed fast bankruptcy. I really don't see how a B&M, with all the attendant costs, can possibly survive when they offer less for more. Yup, their business model has to change. Too bad there probably isn't a successful one for a B&M the way things are going technologically.
     
  6. Richard Travale

    Richard Travale Producer

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    Define "made money".
    Most corporations use the model of "if we don't make 25% more in profit this year than we did last year, then we did not make any money".
    I don't believe for a second that Blockbuster is "losing" money.
     
  7. TimRP

    TimRP Stunt Coordinator

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  8. Christ Reynolds

    Christ Reynolds Producer

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    funny, i heard on the radio today that blockbuster is doing a temporary late fee amnesty to get people who have large (or even small) late fees to start renting again. they will wipe your account clean and let you start over if you come in within 30 days or something. i only go to blockbuster if it is a movie emergency, i try everywhere else first.

    CJ
     
  9. CraigF

    CraigF Cinematographer

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    True, there are many things that can make a company show a "loss". I don't know how they account for all their new stores, for instance. Check out their year-end statements going back to '97, you'll see what I mean.
     

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