Report: $1 DVD Rentals Could Save Customers $1 Billion

A recent article in Home Media Magazine headlined that “$1 DVD Rentals Could Cost Industry $1 Billion,” according to an industry report. The report argues that lower revenue as a result of lower prices will lead to less movie production activity, hurting the economy as a whole.

What about the customer in all of this? Let’s re-write the article’s headline from his point of view: “$1 DVD Rentals Could Save Customers $1 Billion.”

As a customer, this sounds like a good idea to me—and I can put that extra $1 billion (or however much of it is my portion) into other areas of my life that are more productive for me.

The report reeks of union protectionism and overpaid workers whining about a pay cut, as well as brick and mortar rental stores who can’t compete with cheaper and more convenient alternatives, such as Netflix and Redbox. It evades the fact that producers set the price at which they’re willing to sell their products. They sell their products to the likes of Netflix and Redbox, and they set the price for doing so. If they feel they’re not being paid enough, they are free to raise prices (and customers are free to not buy it as well). All this amounts to is a complaint that the market is not paying them enough to make movies that audiences aren’t willing to see (i.e., pay enough to see).

If it’s not profitable to make movies for some producers, fine. Those people may have to find other ways to make a living and be productive. Even if it means less movies are made, as the report argues, so what?

Let’s face it: when it comes to entertainment, quantity is the not the problem. Netflix and others throw buckets of money at research and development, trying connect you to movies that you actually want to see.

If jobs are lost as result of less revenue, those left standing and making movies will be the ones who can make a profit doing it, and ultimately that means those skilled at producing content that audiences want to consume will prevail. It means better movies for you and me, and less crap to filter through.

This report is really a sign of progress, increased efficiency and productivity based on innovation and technological progress, not a negative. So enjoy your $1 DVD rentals and Netflix subscriptions, and enjoy them guilt free.