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I never did understand BB's movie "replacement" costs. When you can buy a movie for $20 almost anywhere, and they sell it for $25-30, why does the replacement disc cost $50-60?
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The higher price covers what might be called their "aggravation costs." That includes the employee time involved in the lost-found-reorder-restock-reinput data cycle, reports to management/hq, lost revenue because the lost DVD can't be re-rented, etc.
Same reason there's a late charge on an overdue credit card bill. -
It has little to do with the replacement or lost opportunity cost. It's a profit center. Some bean counter at corporate hq decided that additional profits from charging $60 to replace a disc would be greater than the loss of income from a few customers going to their competitors because they're pissed off. If they charged less they'd be leaving money on the table. If they charged more too many customers would leave.
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Yeah BB charged me $90 for a VHS movie I lost, it was a costly mistake but I never did it again.
There are no late fees or charges for lost disc's if you use the by-mail only service. -
I dont know how true/relevant but years ago at the local video store (long gone now) they told me it cosdt $120 (AUD) to buy a movie for rent. I.e. it is not the same cost if you buy to rent than it is in the shop for the home viewer.
Im talking like 15 years ago so dont know how relevant to now, but it could be that they are not allowed to be buying them from the local k-mart for rental purposes and as such have a much higher replacement cost. -
That's not the case in the USA. I believe most rental places contract with the studios for various reasons but they are allowed to get their discs anywhere. For example, Redbox was recently buying movies from Walmart because the studios were pressuring distributors not to sell to them.
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The company is not simply paying for the disc; it is also paying for the right to rent it out multiple times. Blockbuster cannot simply buy the retail versions you and I buy at the store. Otherwise, the movie studios would not get desired revenues from rental businesses. Companies like Blockbuster must purchase merchandise from specific distributors that include the right-to-rent legalities.
By the way, my local BB is still in business. Maybe just some stores are closing while the company reorganizes? -
By the right of first sale doctrine in the USA they aren't legally required to buy special rental discs.
http://en.wikipedia.org/wiki/First-sale_doctrine#Application_to_DVDs_and_NEBG_v_Weinstein
But for business reasons (eg, to make sure they have enough discs the day a new hit is released) large video rental companies usually do. -
Block Buster Canada announced about 1 month ago that they are closing most of their stores. I'm only interested if they plan on selling their DVD movies. I always use to rent their too but they turned into a bunch of wieners and changed their policy and made it's members sign a 10 million word contract. I remember stuff about copyright infringement being on the contract and that they reserved the right to ban us from it's store and press criminal charges if anybody copied movies from Block Buster. I laughed into fits when I read that....majority of people are not renting & ripping, they download these days.
Looks like the days of Renting Movies from a fixed store location is on the verge of being phased out due to the internet.
For some people that want to rent movies and not download, I guess business will increase for the pirate ripping in the basement, no need to return, you can just keep the DVD or throw it out! -
Even in my small town, most every major grocery now has $1 a day movie rental vending machines (Red Box or other).
There are a couple of Blockbusters. Remind me to check if they are still in business.Last edited by edDV; 1st May 2010 at 06:12.
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Last time I lost a BB film they charged me $24 not $50 or $60.
In any case they probably lose money on $50 anyway. they can't just buy disks anywhere, they have to buy them from the studios. there is also an opportunity cost in lost rental income while the disk is not available and not generating revenue. -
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