Q&A: How do movies make money when people rent them through a monthly subscription service like Netflix?
Question by travismay108: How do movies make money when people rent them through a monthly subscription service like Netflix?
I imagine that every time they are rented in a store the movie people get some kind of cut. But, how do they do that when people are paying a monthly subscription fee?
Best answer:
Answer by The Walster
You are wrong in your first assumption, movie producers do not get a cut every time a movie is rented from a store. Movie rental companies whether they are store based or online pay a fixed fee for each copy of a movie they purchase, which gives them the right to rent it as many times as they like. I know that in the UK in the last days of VHS the cost for a rental licensed movie was around £50 compared to around £10 to purchase a movie licensed for home use, though what it costs these days I’m not sure.
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