The Business Blog at Intuitive.com

Dave Taylor has been involved with the Internet since 1980 and is widely recognized as an expert on both technical and business issues. He has been published over a thousand times, launched four Internet-related startup companies, has written twenty business and technical books and holds both an MBA and MS Ed. Dave maintains four weblogs: The Business Blog at Intuitive.com, Ask Dave Taylor, Dave On Film, and Attachment Parenting Blog. Dave is an award-winning speaker, sought after conference and workshop participant and frequent guest on radio and podcast programs.

Why DVD rental is such a tough biz: it's a commodity, stupid

I'm all for supporting local mom-and-pop businesses, and this evening, on the enthusiastic prompting of my girls, we went into a local video rental place (though 95% of what they rent, of course, are DVDs). After much deliberation on their part, they selected the Disney film Tinkerbell.

Okay. Last few times I've paid for a rental it's been through Redbox and that's $1/night, so inexpensive that you can forgive the tiny selection in the box.

At the local video rental place, however, it was $4.95 for a rental, and due in four days to boot. Five bucks? Seemed kinda steep, and when I got rave reviews from my little one of this movie I decided I'd buy a copy for her.

A quick visit to Amazon.com and here's what I found:

Can you see the price? $3.75 + $2.98 shipping. For less than $2 more than a short-term rental, I can buy and own a clean used copy with original packaging. Makes it hard to not just buy things that you might want to watch some day, doesn't it?

The problem is two-fold. One, most movies are worth a viewing and maybe, possibly, two, but how many movies have you watched a half-dozen or more times in the last decade? (and I'm a film reviewer with my own film blog, so I know movies pretty well).

The second is that the cost of the product doesn't reflect the cost of production as much as the cost of the studio system. A brand new DVD costs, what, $15? $18? but the disk and packaging cost less than a dollar. Therefore the item itself doesn't retain any sort of value once sold and the used DVD market floats down, down, down, to where you can get just about any movie for $5 or less.

Do you still rent movies, especially in a world of all-you-can-eat streaming services like Netflix and Hulu?

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