The time for rental windows is near (1 Viewer)

[alan-g]

I wrote on this forum some time back that rental windows for DVD was close at hand, I was wrong. But now it is starting to gain momentum again. BB's revenue fell sharply in the 4th Qtr and they attribute that fall to people buying DVD.

Other factors that will precipitate a rental window

**stores are starting to buy less high priced VHS= less revenue.

**A sad fact is that people are burning DVD's with DVD burners.

***international territories have a rental window.



This is a quote from an article in video business magazine.

"Even if consumer spending stays strong, the shift to DVD and cheaper inventory could make supplier revenue plummet, Adams said. In that case, studios will want to negotiate deals that help generate a reliable return from the movies they release, while retailers must be willing to experiment to find win-win terms for both sides. “Once DVD gets to 60 percent to 70 percent penetration and VHS settles into a niche category, then the deals can settle into a given range of pricing,” Adams said. “But it’s going to take a couple years of experimentation and adjusting to a rapidly changing picture.”

Several industry executives participating in this week’s VSM roundtable (see cover) see DVD revenue-sharing as part of an inevitable path toward stabilizing the rental business as it migrates toward DVD. “A test of a rental window appears inevitable,” said VSDA president Bo Andersen. “It must be accompanied by aggressive and equitable revenue-sharing terms and simplified copy-depth programs, or rentailers will underbuy.”

 

[Qui-Gon John]

Or maybe, instead of going to rental window pricing, or even non-release of new movies on DVD for sale to the general public, until after a rental window, maybe the studios will just ignore Blockbuster and let them die! Don't forget, BB's clout has made some of the studios do some things not entirely in their best interest, over the years. I don't think there would be too many tears shed at studios in BB went the way of the dodo.

 

[Jeff Kleist]

Let me tell you something

The VSDA is representing the non-corporate video stores
who are at a point of desperation. Virtually no-one is buying VHS tapes, and they haven't been for a long time. They're all on Rent-Trak revenue sharing or have their own corporate deals in place

The studios are making money hand-over-fist on DVD

BlockBuster is hurting badly

The studios would rather movie to Video On Demand, which is what's happening anyway, a place with virtually 0 distribution cost, and an even nicer split of the cash.

This is desperation talking, not actual events that will take place. Why is there a rental window overseas? Because there is so much less revenue per territory than with North America

 

[Tom_Bechet]

Jeff I always asked myself why we (in Europe) have rental windows. Germany, France, Belgium, Nethgerlands the UK. all have those dreaded windows. An example. Donnie darko was announced for rental in the UK for march (the R1 is available since the middleages)
Insomnia (out in R1 in december AFAIR out to rent in the UK in march.
Rental wiondows are normally about 4-6 months. Last year Paramount have started with rental windows as well.
Warner on the other hand have dealt a serious blast to rental shops with their policy.

Since I've gone multiregion I have bought a lot of R1 (see above)
Rental shops are against the interests of customers. Idon't know why it's still applied here.

 

[Alex Spindler]

I have some difficulty in understanding the logic. DVD has enjoyed a fair penetration so far, and is only getting better. As it approaches the extremely high levels they describe (VHS niche, DVD 70%), the supplier revenue will have grown linearly with the customer base. How can things not be improving in the cases they've mentioned, asssuming the "Buy it on DVD" mentality continues (which it sure does for me)?

 

[Jeff Kleist]

Tom, the problem is that Europe is probably the most fragmented market in the world

Europe is give or take the size of the United states. The problem is, in the US every time you change state, everyone still speaks english and are under the same federal government. In Europe, you change languages AND governments. The extra costs are enormous!

 

[David Rogers]

The coder who created Freenet has a quote, talking there about music and the RIAA, that applies perfectly to Blockbuster's and the other video rental stores' current predictament.

"If your business model is selling water in the desert and it starts to rain, you'd better find a different business model."

DVD means owning DVDs. The market decided that for themselves.

 

[Neil Joseph]

The dreaded rental window policy again! I hate to see one store (BB) push this policy down our collective throats. Anything forced on us is no good. I remember DIVX all too well.

 

[Qui-Gon John]

Neil, like I said above, maybe this could be the beginning of the end for Blockbuster!

I don't see much advantage to the studios in capitulating to Blockbusters push for rental window pricing. All that will do is piss off consumers who will probably just wait and buy the DVD's when they come out at normal pricing. With "buy the DVD" quickly becoming the mainstream mentality, it seems the studios best efforts would be to continue to meet that demand with the best possible product at the lowest per unit cost to themselves.

 

[Eric F]

Didn't Blockbuster have a press release a few months ago stating they're shifting the focus of their business from rental to retail sales?

So why would they possibly want the rental window?

 

[Daniel L]

The VSDA is representing the non-corporate video stores

Jeff,

The VSDA has been out of representing "non-corporate" video stores for so long, this is laughable. They talk like they do, but Blockbuster & Hollywood Video are the VSDA.

Daniel L

 

[RandyArch]

Blockbuster's headquaters is here in dallas. In dallas we have a local chain called Movie Trading Co. They are great, they always carry both versions, and you can either buy new or previously viewed. The way their concept works is that they allow you to rent or buy anything in the store previously viewed or even brand new. No matter what it is , boxed set, single disc. If you rent they take the rental off the eventual purchase price if you buy it because you decide you want it. Recently Movie Trading Co was purchased by Blockbuster. I was told buy a clerk in the store on greenvill ave , that blockbuster will be opening Blockbuster Trading Company stores , and they will be going with this model in the future. They realize that rental pricing is not the way to. Wheater you like him or not president John Antiaco is very intelligent. He knows what the majority of his customers want now, and is trying to make Blockbuster more profitable.

 

[Stephen Orr]

A shame, really, because if I know I am going to buy a title, I am not going to rent it in the first place...

 

[Reagan]

If I owned a rental chain (BB or Hollywood vid), I would move head-first into new DVD sales supplemented by a small DVD rental and resale area. And I would make sure that everyone in the country knows that DVD sales are now my main thing. That's just me.

I almost want to see a test rental window thing just to see them fail (like Vincent Vega talking about his car getting keyed "It would have been worth him doing it, just so I coulda caught him."). The consumer backlash would be unreal.

-R

 

[Mark Bendiksen]

I think that the floodgates are open now. The studios might have had a chance with rental windows if they had started the practice a couple of years ago. As we all know, DVD is mainstream now...big time. I could be wrong, but I just don't see it happening, at least not in Region 1.

It's interesting to see the various "big battles" we've had to fight since the inception of this format. First there was "DIVX", which we won. At about the same time was anamorphic enhancement, which we also won. The fear of rental windows, which reached its zenith a couple of years ago, has been won (in my opinion). Right now, the big battle is continued support of OAR. This includes getting the studios to continue to produce it as well as ensuring the rental chains stock it. This is one fight where I feel that we will have to stay on our toes.

Link Removed

 

[James Reader]

Well as has been noted, most of the studios in Europe have a rental window - although I understand Fox are stopping theirs soon.

All in all the rental window doesn't really bother me - the discs still come out and there's always a big supply of discs released for retail every Monday. Does it really matter if you can't own a movie you want as soon as possible? Everyone expects instant gratification but it wouldn't even inconvenience most of you after a few months (and delayed retail releases may actually improve box office takings)

That said, I do import probably 50-60% of my discs from America, including a number of titles either unreleased or currently in the rental window in the UK (although this is often because I have little confidence the UK discs will be of the same quality).

The only thing that you must question about the rental window in the UK is why bother when the discs are available to purchase overseas? Seems like what a studio may gain on rental revenue may be lost on missed sales 4-6 months down the line.

 

[Tom_Bechet]

Does it really matter if you can't own a movie you want as soon as possible?

Yes James it does. at least for me.
Take Insomnia again. R1 DVD release: 15/10/02
UKR2 rental in march 3rd. retail +-4-6 months later. That's a whole year!!!!!
Thirteen days: R1 July 10, 2001
UKR2: February 2002 again nearly a year.
Thanks to rental window. Extras are then the same or less.
I'm just sick of it. I had a R2 only player for 2 years but bought a multiregionplayer last year.

 

[James Reader]

Tom, but in the meantime you had lots of other DVDs being released every week - plenty of 'new' DVDs to choose from.

Personally the rental window doesn't really bother me. But it's also true that I purchase some discs from R1 which are unavailable to retail in the UK due to rental windows. I don't think it would bother me if I could no longer do this... I'd still have lots of weekly releases to choose from. But I conceed that should this become reality it probably would.

Lacking supplements on R2 releases annoy me much more than delayed releases due to rentals.

 

[Sean Bryan]

Does it really matter if you can't own a movie you want as soon as possible?

Hell yes!

At least I would think it should to people who are into home theater enough that they actually spend time talking about it on an internet forum.

 

[Patrick Larkin]

Blockbuster has such penetration in almost every marketplace. Why not commit yourself to being known as the price-leader on DVD sales? Make it so the consumer knows Blockbuster will have the lowest price. Aggressively go after Best Buy in price and inventory. They have the size to do it. Make sales your main focus and become agressive - something more than charging $21.99 for a new release but having a "price guarantee."