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Strangely written article. For example: "The $1 price is not the main issue for the studios, although they do not like that, either; it is the timing. New DVD

Strangely written article. For example: "The $1 price is not the main issue for the studios, although they do not like that, either; it is the timing. New DVDs sell for about $25. Video-on-demand services price them at about $5. Multiday rentals of new titles cost $4.99 at Blockbuster. Now there is a $1 option at the same time. That could put downward pressure on the industry’s price structure." In other words, the $1 price is the main issue.

ars 17y ago
> In other words, the $1 price is the main issue. Not so. Movies are priced based on how early you get to see it. If you are willing to wait, the price goes down. Redbox prices them at $1 without making you wait [as much], which moves the entire chain of time/price balances.
- michael_dorfman 17y ago
  Let me ask you a question, then: if Redbox were pricing rentals at $10, would the industry have a problem with them? No? How about $5? No? It's the price.
  - pmorici 17y ago
    What about 1 dollar 6 months after it came out on video?
  - ars 17y ago
    You are being too simplistic. It's the price relative to the time. It's not the price alone.
- chris123 17y ago
  This is correct. And this is how studios structure their deals with move theater owners. The studios take a greater cut in the first week(s) and that cut declines over time. Having cheap alternatives available at any time, especially early in relative terms, stings them. The whole pricing structure is, IMHO, silent collusion. It's maximizes their profit as long as they don't get disrupted. When they do get disrupted, they fight back, as is the case here, and it's the case with the health care industry, politicians, lobbyists, and any other member of the status quo, but now I'm ranting!
- tremendo 17y ago
  There are other factors at play also. Redbox is actually $1 per day. Keep it longer, pay more, all the way up-to the price of the DVD, in which case you just keep it. And probably more significantly, they can only hold a very limited supply: someone takes out that new release, it's out, and your options are then go online or another box hoping to find it, guess when the person that got it out will return it, opt for another movie, or, pay a higher price with another vendor to avoid these pitfalls.

ars 17y ago

> In other words, the $1 price is the main issue. Not so. Movies are priced based on how early you get to see it. If you are willing to wait, the price goes down. Redbox prices them at $1 without making you wait [as much], which moves the entire chain of time/price balances.

michael_dorfman 17y ago
Let me ask you a question, then: if Redbox were pricing rentals at $10, would the industry have a problem with them? No? How about $5? No? It's the price.
- pmorici 17y ago
  What about 1 dollar 6 months after it came out on video?
- ars 17y ago
  You are being too simplistic. It's the price relative to the time. It's not the price alone.
chris123 17y ago
This is correct. And this is how studios structure their deals with move theater owners. The studios take a greater cut in the first week(s) and that cut declines over time. Having cheap alternatives available at any time, especially early in relative terms, stings them. The whole pricing structure is, IMHO, silent collusion. It's maximizes their profit as long as they don't get disrupted. When they do get disrupted, they fight back, as is the case here, and it's the case with the health care industry, politicians, lobbyists, and any other member of the status quo, but now I'm ranting!
tremendo 17y ago
There are other factors at play also. Redbox is actually $1 per day. Keep it longer, pay more, all the way up-to the price of the DVD, in which case you just keep it. And probably more significantly, they can only hold a very limited supply: someone takes out that new release, it's out, and your options are then go online or another box hoping to find it, guess when the person that got it out will return it, opt for another movie, or, pay a higher price with another vendor to avoid these pitfalls.