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:
“The enemy are no match for us in a fair fight.... The young men ... of the upper class are kind-hearted, good-natured fellows, who are unfit as possible for the business they are in. They have courage but no endurance, enterprise, or energy. The lower class are cowardly, cunning, and lazy. The height of their ambition is to shoot a Yankee from some place of safety.”
—Rutherford Birchard Hayes (1822–1893)
“The striking point about our model family is not simply the compete-compete, consume-consume style of life it urges us to follow.... The striking point, in the face of all the propaganda, is how few Americans actually live this way.”
—Louise Kapp Howe (b. 1934)