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Are DVDs Software Or Films?
NewsWatcher writes: "In Australia a court case with international ramifications will decide if DVDs are software or films. If they are designated as software, rental prices will go through the roof, if they are films their distribution cannot be limited under copyright laws.
This article explains the ins and outs ." Unrelated incident -- FatRatBastard writes: "C|Net News is reporting that the new Warner Bros Powerpuff Girls DVD is infected with the FunLove virus. Note this only effects those who install the supplemental Windows software that comes on the DVD. The article claims that "The virus only affects PCs that load the disc, not DVD players" so I'm not sure if the DVD auto installs software if loaded on a Win PC, or if infection only happens if the user chooses to install the supplemental software."
Actually, yes. I used to work at a Blockbuster Video, and it was like this.
Remember how you'd see Videos for RENTAL only? That's because the wholesale price is something insane, like $99.99. Then, after the studio believed that the rentals were sagging, they'd lower the price to $19.99 or whatever, and then Blockbuster would be able to take the rentals and "PVT" them (sell them at a used price).
If you accidentally destroyed a rented video, you had to fork over the $100 to buy it. (We had a customer who left the video on top of his car, and then he drove over it when he was returning it. Oops.)
The insane part was that there were some people that would actually pay the $100 to own the video when it came out for rentals.
The presumption that forcing rental places to pay the full $55 will make rental prices go through the roof is, as presented, flawed. It assumes that the added cost of the DVDs will be such that the rental companies MUST charge significantly more to make up the difference. I expect that the cost of media is actually very small relative to the overhead of paying rent and staffing the store, so even a doubling of media price should not mean a doubling of rental prices. It assumes that rental places are forced to use the cheaper, non-rental DVDs because otherwise they would not make any money at all - i.e., that the margins on the rental business are razor sharp and depend critically on the price of the DVD. But a possibility is that these rental places are just looking to save every buck they can, and that they would still make a comfortable (albeit smaller) margin renting out $55 CDs.
Ultimately the price of rentals will NOT be determined solely by the cost of the media to the renting company. It will be determined by the market forces of supply and demand. The price will largely be determined by what price consumers are willing to pay. Given that DVDs are relatively inexpensive now (5-6 times the price of a 2-day rental in Canada), I think it is clear that the maximum price for (say) a 2-day DVD rental is clearly bounded and not much more than what those prices are now, and hence it seems unlikely DVD rental prices would ever go "through the roof".