How do movie rental chains work?
In the 1980s when video began, stores would buy the video outright and then have unlimited rentals for its lifetime. But in the 1990s, stores moved to a revenue-sharing arrangement where they bought the video for a much lower price, kept about 60% of the rental and paid 40% of it back to the studio. To protect the rental industry, the studios held back releasing a movie for sale on video for several months (or a year in some cases). Eventually, I think we will get to simultaneous release on all media – cinema, DVD and download – with people able to choose how they see a film when it comes out. Piracy and illegal downloads demonstrate this is what the market wants anyway, and studios are losing money by not meeting the demand, e.g. record labels have made a fortune out of iTunes, by making legal downloads accessible and affordable. They met the need the illegal market was serving. Studios need to realise they can make more money this way, too. Some film distributors and exhibitors will
