Movie studios: We don't want to rent movies

Submitted by acohill on Wed, 10/28/2009 - 10:14

An interesting fight is brewing between the movie studios and the movie rental outfits. And as usual, it is upstarts like Netflix and other Internet movies on demand outfits that are causing the problem.

For the movie studios, selling DVDs is extremely profitable. Renting, not so much, because they sell a few copies to a Blockbuster or a Netflix, and the rental company gets all the rental revenue. Until Netflix got a toehold, the studios were not too worried about the rental business because video stores also sold a lot of DVDs. Who has bought a DVD from Netflix? Answer: nobody. And the whole movies on demand via the Internet is making things worse.

Why spend $20 to buy a DVD you might only watch two or three times over the next year? If you can pay Netflix one monthly flat fee and watch the movie on demand as many times as you want at no extra charge, why buy? And that's the rub. The Internet is killing the DVD business. Movies are not much like music. The iTunes store sells millions of songs every day, because a) you can listen to music while doing something else, and b) most of us will listen to a song many times. Movies require a dedicated block of time, and there are few movies anybody wants to watch more than once.

The traditional movie and TV business is collapsing under the weight of an obsolete business model. The studios and content owners, instead of adjusting their business models to fit the new dynamic, are engaged in an ultimately futile attempt to hold back the tide. Their answer to sagging DVD sales? "We won't let you rent movies--we're going to force you to buy them." The plan is to not allow movie rentals for at least a month or two after the DVD is released for sale, on the theory that people just can't wait, and will buy it. There may be a few movie fans that will go for that, but the rest of us will just wait.

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Comments

Reader (not verified)

Thu, 10/29/2009 - 13:04

I agree, I'll just wait. I wait already anyway, I hardly ever pay the rip-off prices to see a movie in the theaters...and absolutely refuse to drop a $20 on a popcorn, 2 drinks, and a candy bar. When we go to the movies, we hit local dives like the Radford Theater, or Scarette's in the Radford plaza...where tickets are generally in the $5 range and snacks are far more reasonably priced. Netflix is most definitely the way to go, either DVD or on-demand. In probably a good 5-10 years max, I'm pretty sure almost all of the tv/movie/music/news/entertainment content we want will be on demand over the internet. Sports may be about the only thing still watched on a live broadcast. We haven't watched a tv show during its broadcast time slot in over 5 years, gotta love the DVR. We also don't buy any DVD's unless we get them used, or in the $5 bin at Wal-Mart...too much of a rip-off otherwise. We'll rent or watch it on tv, and if we like it enough, we'll buy a copy so we have it available to watch later when we want to. Because of that, our DVD collection is about 50 total, but those 50 are all golden movies we love and can watch dozens of times. The efforts to make it harder to see new releases will backfire completely. They're re-arranging deck chairs on the titanic, while everyone else who can see what is going on is scrambling for the lifeboats.

Reader (not verified)

Sun, 11/01/2009 - 17:52

Ej, I'll find a way to download it...try to make a monopoly and the consumer WILL change the rules...;)