Rental Price Towards Purchase (Discussion)

[jeremymc7]

This has been asked for before. Not too often but it comes up.

Some services are now offering half the rental fee towards purchase within 30 days of rental.

Since this is for all titles it would appear it's not something to do with the studios but something the streaming service chooses to eat on the rental side. In reality they make more. I would guess by only applying half that covers the payment to the studio for the rental. Then the service makes its money on the sale.

Honestly I never rent. I only buy what I already saw in theaters (which is a rental in itself) or something I haven't seen but know that I want anyway.

If Vudu was to adapt a similar strategy of offering a refund of rental when purchased within a month I know they would more sales from me since I'd be more inclined to rent titles if I know that I have the option to buy at discounted price.

This is why I loved going to the movies every week. I would see upwards of 3 movies every week and for $25/mth my "rental" theater cost was nothing.

Alternately I'd be willing to pay a flat fee each month for set number of rental viewing. I just can't justify upwards of $8 for one movie rental since my $25 AMC card got me 12 movies.

[diamond204]

Its a great idea and extra money for the studios. But that decision lies with the studios, not Vudu. If other services are doing that, for it to happen at Vudu it will take an Executive with passion about the idea that takes it on and courts the studios to have them get on board.

I had the same reply to reduced upgrade to 4k costs as well. They are both great ideas, and likely would bring in a higher and more consistent revenue stream to studios , plus make many customers happier. I hope someone at Vudu can take both of these on and convince the studios to evolve the way they do business. With the pandemic they are evolving quickly on other fronts (launching their streaming apps and offering day and date new releases etc.) but some of their older business methods could surely also use a bit of updating as well.

[jeremymc7]

I don't think it has anything to do with studios in this case,

Example:

Rent $5 end user
$2 to Vudu
$3 to studio

Purchase $15
$5 to Vudu
$10 to studio

Vudu pays the studio for both the rental and purchase.
They credit the user their $2 portion of the rental and just apply it to the $5 they get from the purchase.
So they give up the $2 they would have got on the rental, but get $5 on the purchase.

So the studio gets paid both ways. Vudu doesn't do anything against contract, that we know. They end up making more money since it's likely more people will upgrade a rental to a purchase compared to people that would pay to rent and then also pay again to purchase.

The other reason I don't think it involves the studios if it it did someone wouldn't be participating. The fact that any rental can be converted to a purchase, provide both are available, seems to imply it's just the streaming giving up their rental profit for a large sale profit with the studio getting paid twice and under normal terms.

I'm not asking for it. I never rent. But this would make me more likely to try rent. But I do think there's a fair amount of people who do rent often and would be more likely to purchase a $15 title that they really enjoyed after sinking $5 in for rental. I also think other than the coding involved it's a fairly easy implement. I have limited to no interest myself but I know others do so this was just for discussion. Not a request on my part.

[diamond204]

Agreed that if Vudu only used their portion of profits but what if the movie goes on sale for $10 $8 or even $5. I'm pretty sure with Vudus slim margins they don't want to be the only one with skin in that game...

I'm also pretty sure in any case contracts would need to be amended with the studios, even just to make a clear clarification that in such cases any loss of profit will come solely on Vudu's side.