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DVD rentals: $1

Posted By Barry Ritholtz On March 30, 2004 @ 7:10 am In Music | Comments Disabled

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We’ve previously made the argument that DVDs are a much better value [1] for consumers; that 2 hours of audio and video, plus a wealth of special features offers more entertainment bang for the buck than 45 minutes of audio only. Its been our view that DVDs have been cannabilizing CD sales.

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Now comes another economic assault on high priced CDs: $1 DVD rentals. A company called DVD Station [2] has set up kiosks in retailers such as Altitunes [3] (located in a few dozen airports) offering DVD rentals for the low low price of one dollar a day.

That’s right, $1 per day. This is their ordinary price, and not a promotion or special.

It makes a whole lotta sense once they reach a critical mass in airports: Pick up a DVD at your departing airport, watch it on your laptop while you fly, return it when you land at the next airport. For a buck. Maybe Jet Blue or some other airline will buy them.

As far as CDs are concerned, this is a bad thing. Any discretionary entertainment offering which competes with CD sales at a lower price point ultimately pressures the music sales, while indirectly referencing the artificially inflated prices of CDs. This is yet another example of the music industry getting outflanked in the battle for the consumer’s entertainment time and money.

One cannot help but be amazed at the mismanagement the industry has inflicted upon itself.

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DVD Station’s background can be found here [4].


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2004/03/dvd-rentals-1/

URLs in this post:

[1] DVDs are a much better value: http://bigpicture.typepad.com/comments/2004/03/cd_no_dvd.html

[2] DVD Station: http://www.dvdstation.com/

[3] Altitunes: http://bigpicture.typepad.com/comments/2004/03/cds_or_dvds_2_f.html

[4] here: http://www.dvdstation.com/3_0.html

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