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Reader Comments (Page 1 of 1)
Yuki @ Jul 23rd 2007 8:43AM
Tre revenue sharing is a model where the upfront rental cost associated with a product is replaced by a business where the videoclub and the Studio "share" the rental revenues.
Let's say that one rental copy of film AAA costs 100 $. With the traditional rental model, if a video store wanted to order 500 copies, they would need to pay 50,000 $ upfront, which is a lot of money.
With the revenue sharing model, the upfront cost of each copy goes -- say -- from 100$ to 5$. In exchange, the video store splits with the Studio the revenues from renting their 500 copies of the film.
The bottom line is that the revenue sharing allows the rental chains to order large quantities for each movie, without having to commit huge amounts of money.
Revenue sharing is typically associated to large companies like Blockbuster. Rentrak enables this program to the little guys and the indie outlets, even if they order much smaller quantities.