Info about Movie Rentals
Video rentals in the digital age
Video rentals take place at video rental stores, and users can get a custom laminated card and rent a limited number of movies for a small fee that enables them to see movies from around the world for a fraction of the price of owning them, shipping them, and storing them at home. It’s a win-win situation.
When the industry first began, all videos were distributed on VHS cassettes, which had a far more limited lifespan that DVDs, and would need to be replaced on a fairly regular basis. There was also the risk that they could be taped over when borrowed. As a result, there was a degree of risk when the store purchased a video tape, which was offset by higher rental costs. Most stores also had to pay a large fee in order to purchase the tape, often around $70. Blockbuster Video was an exception, as they negotiated a deal with the studios in which they would receive 60% of sales whilst the studio would receive the other 40%. The success of the Blockbuster model ended up forcing the closure of a large number of other video rental stores, who simply could not compete with the prices that Blockbuster was offering.
Despite the change in the storage medium, most videos now being distributed on DVD or Blu-Ray disks, Video rental stores continue to generate income in the same way, by charging fees for membership, late return of videos, rental and the purchase of ‘previously viewed’ videos. Video rental stores operate under a system of supply and demand. They take advantage of the massively increased demand when a new popular title, such as Avatar or the latest James Bond picture, is due to be release, and buy huge quantities of it to fill their shelves with. This way, the accommodate for the high demand and ensure that almost, if not all of their customers will be satisfied when they come in looking to rent the movie. When demand for these videos begins to fall, they then sell off the DVDs at a reduced price as ‘previously viewed’.
In the 21st century, the ways in which video rentals work has changed. Online rental stores operate in much the same way that the bricks-and-mortar based businesses do, but with an extremely high emphasis on the convenience aspect of their service. They offer to deliver DVDs directly to the door of customers, for a flat rate membership fee each month. There are usually no late fees or additional rent fees required. This means that a user of this service can rent out as many videos as they wish to in a given month. The video is also rented for as long as the customer likes, although they will not be able to rent any new videos until they return the previously ordered title. Online video rental services are often very cheap, and this coupled with their convenience has made them into a very strong competitor for the high street video rental stores.
A third way to rent videos has also recently appeared. This segment of the market is known as the no-return DVD sector, as rentals do not need to be returned when rented. They take the convenience aspect even further, and work by giving the customer the opportunity to rent a video by downloading it from the website. Then, when a period of time has elapsed, the video file becomes unusable. This offers huge competition to both other forms of rental service as the customer is able to instantly watch their chosen film without leaving the house or waiting for it to be delivered.