"I just rented a great movie, but when I went to buy it, the man at the movie store said that is would cost me $99.99, and that the price wouldn't come down for about six months. What's up with that?"

I've been asked this question more than a few times, and now that I've seen it in a node, I figured I'd node an explanation.

When a movie ends its theatrical run, the studio has to choices as to how to release the film. One is referred to as "priced-to-own". In this case, the film is available for sale at a normal price (~$20) on the same day that it's available for rental. The priced-to-own option is usually reserved for blockbuster films, like "Star Wars: Episode I - The Phantom Menace", "Men In Black", or "Titanic".

The other option is to rental-price the film upon its release. That is, price it at around $100. The average consumer will not pay this much to own the film, forcing them to rent if they want to see the movie. Your Blockbusters and Hollywood Videos buy a couple of copies at the rental price, and make their money back after about 30 rentals.

Why do they do this?

Money. When a film such as "Titanic" is released to video, the studio knows that just about everyone who wanted to see it has seen it. Most of those who have seen it know whether or not they want to buy it or rent it. Those that haven't seen it probably aren't interested, but if they are, they'll probably rent. So what you get is a huge number of people who want to buy the tape, and a large number of people who want to rent. The buyers are placated by the low cost, and the video stores can stock the shelves with 100 copies to meet the rental demand without emptying their pocketbooks. This is the theory behind priced-to-own.

Now take a film like "A Life Less Ordinary". Not a big hit at the box office. Not too many people have heard of it, fewer have seen it, fewer want to buy it. Putting up large display of low-priced copies is going to waste space, because most people are going to walk right past it. So, they rental price it, which pisses off the few people, like me, who want to film immediately. If I want to see it, I'm forced to rent. The studio here is hoping that word of mouth will spread enough among renters (since it didn't spread among moviegoers), and help sell more copies of the film when the price finally comes down.

Now, the reason that laserdiscs and DVDs seem to always be available immediately is because (1) both have been seen as a niche market (although not so much anymore with DVDs), and (2) there's not much of a rental market with either (although, again, DVDs are becoming more mainstream).

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