Business Model
| This section needs additional citations for verification. |
The standard business model for video rental stores was that they would pay a large flat fee per video, approximately US$65, and have unlimited rentals for the lifetime of the medium itself. Sumner Redstone, whose Viacom conglomerate then owned Blockbuster, personally pioneered a new revenue-sharing arrangement for video in the mid-1990s. Blockbuster obtained videos for little cost and kept a 60 percent rental fee, paying the other 40 percent to the studio, and reporting rental information through Rentrak. What Blockbuster got out of the deal, besides a lower initial price, was that movies were not available for sale during an initial release period, at least not at an affordable price point – customers either had to rent, wait, or buy the film on tape at the much higher MSRP targeted at other rental chains and film enthusiasts, at that time then between $70–100 before the end of the initial release period.
Read more about this topic: Blockbuster LLC
Famous quotes containing the words business and/or model:
“... business training in early life should not be regarded solely as insurance against destitution in the case of an emergency. For from business experience women can gain, too, knowledge of the world and of human beings, which should be of immeasurable value to their marriage careers. Self-discipline, co-operation, adaptability, efficiency, economic management,—if she learns these in her business life she is liable for many less heartbreaks and disappointments in her married life.”
—Hortense Odlum (1892–?)
“It has to be acknowledged that in capitalist society, with its herds of hippies, originality has become a sort of fringe benefit, a mere convention, accepted obsolescence, the Beatnik model being turned in for the Hippie model, as though strangely obedient to capitalist laws of marketing.”
—Mary McCarthy (1912–1989)