How does a video store like blockbusters pay movie studios for renting their films?
Question by Saracen: How does a video store like blockbusters pay movie studios for renting their films?
How do movie companies make money from video stores like Blockbusters renting their films. Do Blockbusters “buy” the rights to rent the film and keep any any money made, or do the companies recieve a share of the rental fees, so if a movie is hired by many people, the movie companies make a lot of money and if a film does doe not get seen by many, then the mmovie companies make a little? and what about films that are not on the “new release” shelvs? does all the money from them go to blockbusters, or some goes back to the movie companies.
Best answer:
Answer by redherring304
Blockbusters doesn’t have to pay movie studios to rent films. Movie studios make all of their money from ticket sales when the movie is in the theater and individual copies sold (but not rented). Blockbuster merely buys many copies of many movies.
If you really want to get to the nitty gritty you can take a look at section 109 of the US copyright law (title 17 of the US code). It’s frequently referred to as “the right of first sale”. It says that once you own a copy of a work (including a movie) that copy is yours to do what you want with. You can give it to someone, lend it, rent it, sell it, even destroy it if you so wish. This is the law that allows Blockbuster to rent their movies (all of them, regardless of which section they’re in). (It also happens to be the law that allows libraries to lend books.)
What Blockbuster cannot do (and no else legally can either) is make copies of the movies because then the movie companies would not make the money they’re entitled to from those copies. The way movie companies make money from video rental stores like Blockbuster is that they must purchase every movie in their store. (e.g. If they have 20 copies of Gladiator, then they had to purchase all 20 of them). That money goes to the movie companies.
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