I have never thought to ask this until today: Do video stores have to pay some sort of licensing fee for renting videos?
I am not sure about the US, but in Australia, speaking only of VHS tapes, not DVDs or games or anything, the actual physical tapes were usually a lot more expensive to buy.
I never worked in a video store, so I may be wrong, but I was pretty good friends with the owner of a small non-franchise store near me, and I know he was paying about AUD$120 for most movies.
The reason being, apparently, that the cases of the tapes (the black casings that hold the tapes, not the boxes) were more sturdy, as was the actual tape inside. Much thicker than a normal tape that you would buy for home use. He needed to rent each video about 20 times in order to turn a profit on the tape.
For videos from places such as Disney, which often released videos to rental on the same day they’d release them to retail outlets, I assume they simply charged more for the tapes that were going to rental stores. I am not sure that there’s any way that Disney could stop the guy going and buying the copy from Kmart and renting that. I know that I have seen more than a couple of video stores near here renting the latest re-release of a VHS tape, using it to replace older stock.
Most of the time, with videotapes at least, there is a release to rental date, and a sell-through date. The rental date allows stores to stock and rent out the tapes. These tapes can cost around 90 bucks a copy. A few months later, the tape will be released at a retail price for consumers to buy. So Blockbuster has to pay more upfront. DVD’s have screwed this up a bit, since their sell-through date is the same as the rental date.
Not in the US. The stores pay a certain amount - usually $100 per copy - for the videos. Not sure about the DVDs, though.
The more copies a store buys from the distributor, the less they pay per copy. I’m sure huge chains like Blockbuster have prearranged deals that cost them the least.
Not in the US. A video store will pay up to $100 per copy for videos. Not sure about DVDs.
The more copies the store buys in bulk, the less the per-copy price is; places like Blockbuster undoubtedly have deals with the major distributors.
It depends entirely on which studio we’re getting the videos from (former video store manager here).
Some studios have what’s called a revenue sharing program whereby we pay reduced rates for individual titles (Say, roughly $40-60 a copy rather than $100 or more) but have to pay in an estimated profit cost (hence the ‘sharing’ part).
Other movies are bought outright at higher prices.
No licensing fees per se, but there are strict fees levied for breaking streetdate (and a nifty little hotline to report them!)
If video stores pay $100 per tape, why then do they only charge you $30 if you loose it?
I’ve had ridiculous amounts of trouble trying to rent videos in another province than my drivers licence sans major credit card number going on their files, and have been asked for more ID and other paperwork than Revenue Canada just to rent a grainy Cheech & Chong movie from the 80’s for $3.00 (some of the questions demanded bordering on illegal). Now I’ve never lost a tape, but the membership papers (back in the days when they actually filled out papers) say you’ll have to pay around $30.00 for a lost or damaged tape.
The tapes I rent are (as far as I can tell) indistinguishable from your run of the mill blank tapes, and there are certain video stores around here that I’m strongly suspicious of renting bootlegged tapes which cost them next to nothing - 200 sq ft. stores with 24" clearance between ceiling to floor shelves full of every movie made excluding the new American releases, all held in cheap flimsy identical cases with the title written on a scrap of white paper in felt pen.
Heh heh, sorry if I sound like I’m ranting, it’s just that in my experience the video rental stores I’ve gone too usually play the “sassy victim” role, more so than any other business… so I’d like to hear something to back up their claims earning a hard living; particularly when there’s a new store going up every few months… business can’t be that bad…
It can be a nightmare getting people to pay $4.77 in late fees. Can you imagine trying to get a hundred bucks?
Some rental places require a credit card to open an account. You lose the tape and you get a nasty surprise on your next statement.
'Round these parts (northeast corridor, US), we never bought from a studio directly. The distributor buys them from the studio, and the stores buy from the distributor.
Regarding the $100 thing, the store has to look at it practically. Let’s say you lose Catch Me If You Can, and it’s only been out for rental for a few weeks. They could charge you the full retail cost (which is what most membership applications state, I think); but would you pay it, willingly? Probably not. Probably that would piss you off. And they don’t want to piss you off needlessly.
Still, they want some money, so they ask for a reduced rate. When I did retail (7.5 years), I did it this way: If a movie was lost or was being returned say a month late, then I would tell the customer that I’m supposed to charge them the full retail cost, but that I will charge them only two weeks’ worth of late fees. Something like that.
Getting some money from the customer but without cheesing off the customer is ideal. Better than getting no money or getting a lot but losing a customer.
Regarding the credit cards, I once did wind up charging people on their cards. After I had contacted them via phone - or attempted to reach them - for weeks, and after I had written them several notices. If they hadn’t even responded, then I had no choice. This was a last resort, and when I did do it the movies had been gone for many, many months.
Needless to say, many of the cred cards were declined. 
I never saw a $100 video. I asked the store guy this before & he said that he pays anywhere from $20 to $85 per video. On opening day he can visit Longs or Target if he wants & buy them for $15.99 too.
Sometimes BB rental stores buy the rights to a video so no other store can buy it for rental. tsk
What some stores will do to save cash - and this would be the mom and pops - is go to discount warehouses and buy a bunch of movies. Trouble is, they do this after the movie’s been released, so they miss out on that opening-day influx of business.
“they do this after the movie’s been released,”
Alot of times they are sold on Tuesday, which is the day they come out. But not always.
Tuesday is usually the street date. Some stores will get them ahead of time and put them out for rent or sale before street date, which is a violation. The larger store chains like WalMart frequently do this - after all, are the distributors really going to not sell their movies to WalMart? (In general stores get them before street date, with few exceptions, so that they can prepare them for rental/sale and can therefore start renting/selling first thing the morning of street date.)