2009-10 Consumer Choices: Movie Rentals
Student Guide for Junior/Intermediate Levels
Introduction
Remember the last time you wanted to rent a movie? Your parent probably took you to the store, you picked out a movie that you wanted to watch, your parent probably paid for the movie and you left. With the new ways to rent movies such as on the internet or at the grocery store, going to a movie rental place such as Blockbuster might not give you the best deal possible. With new rental options, learning how to compare rental prices for many different products can save you money.
Why compare costs and save?
There are many reasons why you should save money on your expenses. The most important reason is that it can help you develop good saving and spending habits. These habits will be helpful to you in the future. Also saving money will help buy things that you want in the future such as a video game, a DVD or supplies for your favorite hobby.
Key Terms
In order to understand the movie rental process, we are going to look at some key terms. These terms will help you understand words you may see at a movie rental store.
· Blu-ray – A high definition version of a DVD movie that usually costs more than a regular DVD. You must have a Blu-ray player to play this type of movie.
· Business Day – A day in which businesses are open. These are usually Monday through Friday, except for days that have national holidays. Renting from companies that deliver through the mail will tell you how many business days it will take to receive your movie.
· Credit Card – A card that you can purchase products with now and then pay for them at a later date.
· Debit Card – A card that is linked to a checking or savings account and used to purchase products. You must have money in your checking or savings account for it to work, and is just like carrying cash.
· Due Date – When renting a movie, this is the date and time that you must have the movie back to the store before having to late fees.
· Kiosk – A computer station available for public use. With movie rentals, it is a large computer where you can scan a credit card to receive a movie.
· Late Fees – An extra amount of money you must pay if you return your movie after the due date.
· Membership Card – A card that shows you belong to a club or organization.
· Membership Fee – An amount that you have to pay to join a store before you are allowed to rent any movies.
· New Release – A movie that just came out onto DVD.
· Streaming video – A method of watching videos over the internet. The movie it is played through a provider. There is no hard copy of the movie downloaded to the computer.
· Subscription – Paying a monthly amount of money to receive a product or service.
Renting a Movie from a Store
Movie rental stores like Blockbuster have been around for a long time. In order to rent from a store like Blockbuster, you must be 18 years of age or older to open an account first. One can open an account by filling out paperwork with your name, address, and contact information. A credit card will be needed to be kept on file, in case a movie is lost or not returned and they can charge you for it. Once the store has all of the information needed, a membership card will be issued.
Without a card, a movie rental store will not allow you to rent a movie. Once a member, you find a movie that you would like to rent. Movie rental stores usually have a selection of hundreds of movies, which is beneficial if you don’t know what you want to get. They usually have several copies of newly released movies, which are in high demand, so the chances are they will have it in stock. Movie Rental stores will allow you to check out up to 8 movies at a time and most if any do not charge you a membership fee to join. Also, you must return each movie back to the same store that you rented it from.
Movie rental store prices vary in price depending on where you go. Some stores use the format with “no late fees”. You can check out the movie, and if you don’t return it within a specified time period, the store will charge you for the whole cost of the movie. From this point, you have a certain amount of days to return the movie and your money will be refunded. However, if the movie is not returned charges are finalized and you now own the movie.
Renting a Movie from the Mail
A new way of renting movies offers the ability to rent movies either individually or an unlimited amount per month over the internet. In order to start with an unlimited rental program, you will need to go the company’s website, like Netflix at www.netflix.com, and create an account. Again you will have to be 18 years of age or older. You will need to provide your name, address, contact information, and a credit card. The credit card is needed to begin your subscription and there is a monthly charge put on the card, depending on the rental plan you choose.
Internet/mail rental plans vary based on amount of regular DVDs that can be rented at a time through the mail or the amount of movies that can be downloaded and viewed. Also the cost of renting Blu-ray DVDs vary based on pricing package chosen.
Once you decide the plan that works best for your budget and for the amount of movies you are going to rent at a time, you can go to the company’s website and select the movies you want to rent. They will mail you the DVDs you have selected and you should receive them within one business day. Included with the DVD is an envelope that you put the movie in and send back to the company once you have finished watching it. Once they have received the movie back, they automatically send you another movie on your list. There is no extra cost for sending movies back to the company.
Once you start a membership with a company like Netflix, they will keep charging you every month until you cancel it. To cancel, you will have to call and notify the company that you are canceling and which month will be the last you want the service.
Netflix has over 100,000 movie titles, and hundreds of copies of each movie. They also offer 12,000 movies and TV shows that you can watch online. This is a service that is special to Netflix because you can watch many older and some current movies at any time on your computer. There is no extra charge because it is included in your membership fee.
Blockbuster also has a program called Blockbuster Online, similar to Netflix, in which you can rent movies online. There is one feature to Blockbuster Online that is unique where you can return movies that you rent online to a store, and exchange them with movies they have in stock. The new movies checked out in the store will count towards the number checked out at a time, but you can get your next movie immediately rather than having to wait a few days for the mail.
Renting a Movie from a Kiosk
Another new movie rental option is renting from a Kiosk often found at major retail stores. Kiosk movie rentals do not require a membership card or a monthly fee. To rent a movie from kiosk movie rental, you just have to find a kiosk nearby like the one pictured below.
The kiosk has a touch screen built into the front of the stand, which shows the movie selection currently available. In order to rent a movie from the kiosk, a credit or debit card is needed to pay for the rental purchase. Once you select the movie wanted on screen, it will ask you for credit or debit card. You will be charged $1 per day that you have the movie. Once you check it out, you have 24 hours to return the movie back to the kiosk location before you are charged another $1. Some companies will allow you to use any kiosk to return the movie. Be sure to follow the rental instructions carefully to avoid extra charges.
There are thousands of movie rental kiosks throughout the United States, and most of them are located at the entrances of supermarkets, grocery stores, and drug stores. Some companies have limits on the amount of movies you can check out at one time while others do not. One of the disadvantages of movie rental kiosks is that it is limited by the size of the kiosk and usually holds between 50 and 75 titles, with a few copies of each one. Therefore, the movie that you might want might already be checked out by somebody else.
Renting a Movie Pay-per-View
Many cable and satellite providers now allow you to purchase a movie on your television at home. You must have a cable provider that offers the service and a remote that allows you to order movies. This service is pretty standard with digital cable and satellite cable providers. Prices range from $2.99 to $4.99 per movie, and it must be watched on the TV it was ordered from. The movie rental will last for 24 hours, and you can watch it or stop and start the film as many times as you want with your digital remote. All of the services are different in terms of the cost structure, as some charge extra for new releases or Blu-ray, if even offered at all.
Activity 1 Worksheet
Advantages and Disadvantages of Movie Rental Options
Use the chart below to identify what you believe to be the advantages and disadvantages of renting from Netflix, Blockbuster in store, and Red Box. Be prepared to explain why you think each item is an advantage or disadvantage. (Some possible answers have been filled in).
Advantages / DisadvantagesInternet Movie Rentals
Movie Rental Store
Pay-per-View
Movie Rental Kiosk
1. Which service do you think is the best one for you?
2. Why do you think this is the best service for you?
Activity 2 Worksheet
Using the data in the table or student workbook, add up the cost of renting a movie based on the information provided under each situation.
Blockbuster Costs: / Netflix Plans:· $4.75 per DVD rental
· $5.75 per Blu-ray DVD rental
· $2.26 late fee per day for a New Release movie
· $0.59 late fee per day for anything that is not a New Release movie / Option #1: Costs $8.99 per month + $2 for the Blu-ray option
With this plan, you can check out one movie at a time and exchange each DVD as often as you want. You are also allowed to watch an unlimited amount of movies on your computer with this plan.
Option #2) Costs $13.99 per month + $3 for the Blu-ray option
With this plan, you can check out two movies at a time and exchange each DVD as often as you want. You are also allowed to watch an unlimited amount of movies on your computer with this plan
Option #3) Costs $16.99 per month + $4 for the Blu-ray option
With this plan, you can check out three movies at a time and exchange each DVD as often as you want. You are also allowed to watch an unlimited amount of movies on your computer with this plan.
1) Nick is renting two movies from Red Box kiosk. He will have the movies for three days. How much will renting this movie cost him?
2) Jenny wants to rent a new release movie from a Blockbuster store. She wants it to be a Blu-ray DVD, and is OK with having to pay the extra cost. However, she is going to return the DVD two days late because it fell under her bed and she forgot about returning it. How much will this rental cost her?
3) Charlie is trying to decide which Netflix plan to subscribe to. He wants the Blu-ray option on his plan, and he wants to rent 20 movies next month. Charlie wants to be able to rent the movies two at a time, and also be able to watch them on his computer. How much will his monthly plan cost?
4) Brad is renting 2 movies from Blockbuster; one is a Blu-ray new release DVD and one is a regular DVD that is not a new release. He wants to watch the regular DVD twice, so he returns it one day late. What is his total cost to rent the movies?
Practice Junior Consumer Situation for Movie Rentals
Nick, age 9, is leaving today for a family vacation and needs to rent two new release movies for his portable DVD player. He will be gone for three days, and wants to get the best deal that fits in with his trip. Help Nick choose the best way to rent the two movies that fit his movie needs. Rank them in order from 1 (best choice) to 4 (least desirable choice).
1. Rent them from Blockbuster. Blockbuster charges $4.50 per movie, and he is allowed to keep them for two days. After two days, he would be charged an extra $2.50 per movie per day, and there is no membership fee.
2. Rent them from Netflix. Netflix charges an $8.99 per month membership fee for unlimited movies that are checked out one at a time. The movie arrives in the mail in one day and after that first movie is returned, he can rent as many others as he wants for the rest of the month.
3. Rent them from Red Box. Red Box charges $1 per movie per day, and there are no late fees or membership fees. There is no limit on the amount of movies Nick can rent at a time.
4. Rent them on Pay-per-View with DirecTV. He can rent his movies at home with his cable provider, DirecTV. Assume each movie rented will cost $3.99 per 24 hours the movie is rented. Also, they are only capable of being watched on the TV they are rented from.