Pretty self explanatory. I read somewhere that this is becoming a source of income to rival theater tickets. Does netflix have to pay Paramount when someone rents one of their movies?
Rental stores (included Netflix, et al) pay a much higher price for their DVDs than you do when you buy them at the store. A newly released blockbuster film may cost $100 or more per copy for the rental stores to buy. The high price is for permission to rent the movie out (and charge for this) and of course to get it before it’s released in stores to the general public.
The latter reason is disappearing somewhat, as studios begin releasing DVDs for rental and retail at the same time. Since the DVD market is many times the size that the VHS market ever was, the studios are now making a decent amount of money on retail sales. The result has been that the time between theatrical release and retail release has gotten shorter and shorter, so the retail release can come while the movie is still in the public consciousness.
Before DVDs, few people ever bought VHS cassettes, so the studios could rely on the rental stores marketing new releases for them. Thus, there was little incentive to produce the video so shortly after the theatrical release. Plus, theatrical running times were a little longer as well.
I don’t see how their price can be an issue of buying permission to rent the DVDs, as it’s my understanding that the owner of a copyrighted work inherently has the right to rent it at their discretion–it’s theirs. This is how libraries operate; they don’t pay a different rate. Could anyone clarify?
No, rental outlets don’t pay a per rental licensing fee. The studios make money from DVD rentals by selling the DVDs.
However, this may be changing, as the intense competition between blockbuster and netflix is yielding new business models. In december, blockbuster announced they had reach an agreement to become the exclusive rental venue for new films from the new Weinstein brothers studio. From this article:
Ah, thank you for your replies. I thought maybe it was like some sort of how-radio-stations-pay-ASCAP kind of thing. Christ I hate the Weinstein brothers.
Several years ago, Blockbuster began a revenue-sharing deal with several distribution studios. This coincided, not so coincidentally, with their “Guaranteed In-Stock or it’s free!” promotion. My understanding of it as a store manager was rather vague, but basically each store got a metric shitload more of each copy, but didn’t really “own” them the way we did non-revenue-sharing titles. Corporate kept track, as they do on all titles, on total rentals and rental per unit and paid the studio a portion of each rental. After some period of time, we’d pull excess copies and send them back to corporate. Where they went after that, I have no idea. I do remember it was a very big deal if we didn’t send them back with their cover box intact, unlike library titles which we tried to keep cover boxes with, but the world didn’t end if one was lost or damaged, so I suspect this was part of the agreement with the studios. (This was back in the early DVD rental days, so I’m talking VHS here.)
This was not on all titles, only the biggest ones which were “guaranteed”. I don’t know if it’s still going on, as I haven’t been with the company for seven years now.
Well, I know there are some restrictions on what you can do with it. The warning blurb that comes up that says something like “for private home viewing only” means you can’t start your own theater and charge people to watch your DVDs on a big screen, for example. I wonder whether that has any relevance to the rental issue.
At least for scientific journals, institutional subscriptions are significantly more expensive than personal subscriptions
The basic situation with Joe’s DVD rentals is that Joe buys the DVDs and doesn’t pay the studio anything. He can buy them anywhere he wants; since there is no copyright issue (he’s not making copies), studios can’t dictate price.*
As others point out, some big distributors have worked out deals with studios that may give the studio a payment. But those are optional. If you set up your own DVD rental store, the studios can’t ask anything.
Now, back with videotapes, the studios “charged” the stores by setting up a two-tiered system: priced for rental ($70-80 a tape) and priced for sale ($15-25) per tape. The process evolved: first, all tapes were prices for rental; then some were priced for rental for a period of time (six month) and then prices for sale; and finally some were priced for sale immediately and others were priced for rental (though these may eventually be priced for sale). In other words:
- Tapes $80 retail price.
- Tapes $80 for six months, then $20
- Some tapes $20; others $80, with some of the $80 tapes reduced to $20 after six months.
DVDs were priced for sale from the beginning.
*In theory, there might be trademark claims, but that would be very hard for studios to win as long as Joe is merely displaying DVDs for rent: it’s no different from displaying DVDs for sale.
Can someone explain how this is supposed to work? As has been pointed out in this thread, you don’t need a special license to rent movies. In the past, the studios made extra money off of the rental stores by jacking up the prices on first release, but they don’t do that with DVDs. What’s going to stop Netflix from ordering 10,000 copies from Amazon.com and then renting those?
Brilliant! What better way to increase exposure than by limiting the number of companies that will provide your product. :rolleyes:
But there’s nothing (legally) that stops the institutions from rebuying the journals from an individual. I’d guess that whatever the difference in price is, it’s not enough to overcome the hassle of doing that.
Is that really so? I don’t own a TV, but can recall visiting many homes where there were shelves containing dozens (in a few cases, hundreds) of movies on VHS.
Tangentially related, for those who might be interested, is this recent New Yorker article. It doesn’t deal explicitly with how revenue from DVD rentals gets back to the studios, but it’s an interesting article nevertheless.