DVD rental stores copyright debacle

[saffakanera]

Head over to xbox-360.co.za, those folks have about 20 dedicated forum trolls who would proclaim you worse off than a rapist or murderer if you even MENTION piracy, those poor poor people are the products of Monopolies and they dont even know it. Shame.

 

[Glordit]

A picture is worth a thousand words
http://mybroadband.co.za/photos/showphoto.php?photo=4675&cat=500

 

[adcadc]

I had a chat with with my local video store owner. He is forced to only buy his "rental" DVD's from NM and SK at about R700/disk. He may not replace a faulty disk from any other vendor (eg Musica etc) for a quarter of the price. This rule applies for new and old releases. The "distribution" fee is apparently included in the purchase price of the disk.

 

[RichardG]

Everyone knows If you own a business you've to do everything the Legal way but for Mr. Video to make a bad reputation out of themselves, I'd blame their Marketing Department, their Buyer and also the CEO...... Same thing what happen to Musica, they got sued for Sony Playstaion Goods, can we all stop sue each other really...

I am even afraid to start a business at this rate, they'd even sue my pants and underpants just to pay legal cost ......

I had a chat with with my local video store owner. He is forced to only buy his "rental" DVD's from NM and SK at about R700/disk. He may not replace a faulty disk from any other vendor (eg Musica etc) for a quarter of the price. This rule applies for new and old releases. The "distribution" fee is apparently included in the purchase price of the disk.

Long ago i chatted with a guy who owns a video store, back then they paid nearly R700 for a dvd movie, and R500 for tape, not sure what the prices are like now as inflation has doubled since 1999

 

[DJ...]

The "distribution" fee is apparently included in the purchase price of the disk.

Whats the problem there? Without that clause, his business wouldnt exist as the studios or distributors would set up a direct link with the consumer.

I dont see a problem with the stance of the studios. It is business! The video stores dont have the rights to distribute it in SA and therefore need to go through the correct channels, just like any other business.

 

[Syndyre]

Whats the problem there? Without that clause, his business wouldnt exist as the studios or distributors would set up a direct link with the consumer.

I dont see a problem with the stance of the studios. It is business! The video stores dont have the rights to distribute it in SA and therefore need to go through the correct channels, just like any other business.

Its business but its still acting monopolistically in that they price differently in each market.

 

[PeterCH]

Everyone knows If you own a business you've to do everything the Legal way but for Mr. Video to make a bad reputation out of themselves, I'd blame their Marketing Department, their Buyer and also the CEO...... Same thing what happen to Musica, they got sued for Sony Playstaion Goods, can we all stop sue each other really...

I am even afraid to start a business at this rate, they'd even sue my pants and underpants just to pay legal cost ......


Long ago i chatted with a guy who owns a video store, back then they paid nearly R700 for a dvd movie, and R500 for tape, not sure what the prices are like now as inflation has doubled since 1999

In the EU a DVD with RENTAL rights usually costs double what a normal DVD costs. Once you buy such a DVD, you can rent it out as often as you want and reap the rewards. Of course DVDs get scratched and damaged in other ways but excepting that limitation, the DVD can be used to earn extra income. Home Video versions on the other hand may not be rented out.

THAT and the EXCLUSIVITY agreement between local distro and Hollywood studios are the reasons why these parties sued Mr Video, they weren't getting their cut of the rental profits.

You could compare it to Windows Vista Basic or Home Edition vs Windows Vista Business Edition for the big boys or an MS Office/Adobe Product Educational Licence vs a Commercial licence. With one you can generate money, with the other you may not (or use in a business setting).

 

[milomak]

RichardG - i seriously doubt this will dent Mr Videos reputation amongst consumers. Well it might dent it in the fact that they will be held back in being able to offer what they do. But not because of the judgement handed down. At least not directly.

 

[DJ...]

Its business but its still acting monopolistically in that they price differently in each market.

Please elaborate as I dont see the connection between pricing differently and monopolies?

 

[PeterCH]

Its business but its still acting monopolistically in that they price differently in each market.

I'm willing to bet the local pricing is fixed by the local company, in this case SK or NM. They want to see how much they can milk the local
person for. Since not many people import from the internet - and of those that do - most use the super expensive Amazon.Com or even worse Amazon.co.uk, its easy for the local company, be it Ster Kinekor or Core (Apple products) to fix its own prices. I'm sure that Hollywood studios
sell these licences in bulk (probably on market projections or film popularity) but SK/NM fix the price ultimately to maximise profits.

 

[milomak]

It's a duopoly (to use the correct term). It means that even though NM and SK might not colloborate on what prices they charge, the information is probably in the public knowledge and as such they determine prices not market forces. See the cellphone industry.

 

[PeterCH]

Please elaborate as I dont see the connection between pricing differently and monopolies?

The local distributor has an exclusive agreement for say SONY Pictures
titles in SA. They fix the price. No other outfit can undercut their prices,
because to do that they'd have to parallel import these items and that's
not allowed because of these regional exclusivity agreements studios
have with local companies. At the end its bad for the consumer.

In the USA, Walmart or Best Buy can purchase (or not even purchase
but promise to stock -- WM is so much bigger than Hollywood) 10 gazillion copies of a DVD
and get a huge discount from the wholesaler (studio in this case directly, I bet)
and pass these savings on. In SA the wholesaler is NM or SK, PnP
can't go to Warner and get its own copies unless they sign a seperate deal
- then again the SA market isn't big enough for that prolly.

 

[PeterCH]

It's a duopoly (to use the correct term). It means that even though NM and SK might not colloborate on what prices they charge, the information is probably in the public knowledge and as such they determine prices not market forces. See the cellphone industry.

It would be a duopoly if SK and NM had the same movies in their inventory.
As it is a release is either SK or NM and you can only buy a copy locally
from ONE of them and not from BOTH, eg you don't get a SK version of LOTR
and a NM one.

With Cell Phones you can buy the same N95 from Cell C, Virgin, Vodacom or
MTN.

 

[Syndyre]

Please elaborate as I dont see the connection between pricing differently and monopolies?

Its not really a direct connection I suppose but assuming you're selling a product in different markets at different prices you have to have some form of monopoly in terms of distribution rights etc. to prevent companies like Mr Video from engaging in arbitrage and importing from the cheaper market. Maybe monopoly was the wrong word to use but their intellectual property rights do in a way give them a monopoly, if they were selling a commodity and were one of many sellers they couldn't do this.

 

[DJ...]

The local distributor has an exclusive agreement for say SONY Pictures
titles in SA. They fix the price. No other outfit can undercut their prices,
because to do that they'd have to parallel import these items and that's
not allowed because of these regional exclusivity agreements studios
have with local companies. At the end its bad for the consumer.

I see the exclusivity point of view, it was the pricing differently comment that confused me. Milo is correct that it is a duopoly and yes maybe something should be done about it, but the studios who own the work have every right to choose their distribution network as they see fit. In our case, it is through NM and SK who have a full distribution network including the cinemas, so it makes logical business sense to maintain these channels and not be found in breach of contract by being seen as being complicit in the distribution directly to the stores.

There is nothing stopping a competitor from operating, and I am sure the studios would love an additional revenue stream and would probably encourage a more competitive environment. Until then, we are stuck with SK and NM.

And I maintain that the threat aimed at Mr Video is just how business works and they should have known this. The studios are merely maintaining their future business (distribution in SA). Even though it appears from a consumers perspective that they are protecting a duopoly, it was merely a necessary business move and it is not their problem that there are only two distributors in SA.

 

[Syndyre]

And I maintain that the threat aimed at Mr Video is just how business works and they should have known this. The studios are merely maintaining their future business (distribution in SA). Even though it appears from a consumers perspective that they are protecting a duopoly, it was merely a necessary business move and it is not their problem that there are only two distributors in SA.

I agree but I think the movie studios are going to find out, as the music labels did, that their old business model doesn't necessarily work in a digital world.

 

[DJ...]

I agree but I think the movie studios are going to find out, as the music labels did, that their old business model doesn't necessarily work in a digital world.

I agree 100%. It would provide them with a direct link to their consumer which would actually be a great business move for them. However it would require huge investment from each of the major studios and maybe even some consolidation in the independant studios. The distributors would then become cinema providers only though, and they would fight it tooth and nail!

 

[Syndyre]

I agree 100%. It would provide them with a direct link to their consumer which would actually be a great business move for them. However it would require huge investment from each of the major studios and maybe even some consolidation in the independant studios. The distributors would then become cinema providers only though, and they would fight it tooth and nail!

The distributors definitely would but you could also make another argument that cinemas themselves are fast becoming irrelevant. As more and more people get HD TV's at home with surround sound etc. the benefits of going to a cinema become less and less and I've certainly noticed that my friends and I go less and less, hardly ever now actually. I remember reading an article saying that Ster Kinekor's profits were down massively too (around 60% IIRC). Of course that would give the distributors more reason to fight it but it'd also be easier for the studios to ignore them.

You'll probably always have some form of distributor involved, even if it does end up being more of an itunes-type company but there's no reason for them to have exclusivity.

 

[PeterCH]

I see the exclusivity point of view, it was the pricing differently comment that confused me. Milo is correct that it is a duopoly ...

How can it be a duopoly if SK and NM have exclusive agreements (exclusive of each other). Secondly there are other smaller distribution groups too which handle some other releases, some Kung Fu movies get done by Next or some other lesser known labels.

It would be a duopoly to me if SK and NM had the same movie. It's not a duopoly. It's a monopoly, once you sign an agreement with the copyright holder for a given region, you have monopoly rights for that title in the given area for that long. I'm talking DVD releases here. I guess when it comes to theatres
movies often get shown in both theatres, and Starz and even independent theatres like the Labia in CT.

What is lucky for the consumer is that US (and other retailers) don't care about selling their DVDs internationally. I remember when Titanic came out
and everyone was who anyone wanted to buy it on Laser Disc except
it only came out exclusively in Japan on that. Except CDJapan didn't
care about their distro's licencing agreement and sold the movie back to
the westerners. The same happens everywhere now with DVDs (only Kalahari won't sell locally released DVDs abroad because they're scared - but
find any 2 bit DVD store on the web and they'll sell you their entire region locked catalogue).

 

[DJ...]

It is a duopoly in the sense that they are the only two major distributors that I know of at least. But whether they abuse that power in the form of a duopoly or not is something I cant answer as I dont know enough about either of their businesses.