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Simply put.
Rental companies pay huge sums to movie studios for the right to rent movies.
Most of the money being exchanged up front.
They rarely call them "royalties" however.
By The way, most of the money studios make is through renting, believe it or not.
Source(s):
Worked in a theater for a year.
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"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 cassette itself."
This is followed up with:
"Blockbuster obtained videos for little cost and kept 60 percent rental fee, paying the other 40 percent to the studio, and reporting rental information through Rentrak."
Source(s):
http://en.wikipedia.org/wiki/Blockbuster_Video
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Answered Question
M$1
December 21, 2008 06:54 AM
How do brick and mortar movie rental businesses work? For example Blockbuster.
For example, do they have to pay more wholesale (an inflated price) for the DVD's/movies they rent out to hiring customers? Do they need to pay royalties? How do rental box office figures work? Do the movie studios own movie rental companies? 
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Best Answer Chosen by Asker
| December 21, 2008 07:11 AM |
Rental companies pay huge sums to movie studios for the right to rent movies.
Most of the money being exchanged up front.
They rarely call them "royalties" however.
By The way, most of the money studios make is through renting, believe it or not.
Source(s):
Worked in a theater for a year.
| Asker's Rating: |
• It was helpful. Was looking for a comprehensive one though.
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Other Answers (1)
December 21, 2008 07:07 AM
Wikipdeai has the following on the blockbuster article: "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 cassette itself."
This is followed up with:
"Blockbuster obtained videos for little cost and kept 60 percent rental fee, paying the other 40 percent to the studio, and reporting rental information through Rentrak."
Source(s):
http://en.wikipedia.org/wiki/Blockbuster_Video
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