A video rental shop/store is a physical retail business that rents home videos such as movies, prerecorded TV shows, video game discs and other content. Typically, a rental shop conducts business with customers under conditions and terms agreed upon in a rental agreement or contract, which may be implied, explicit, or written. Many video rental stores also sell previously-viewed movies and/or new, lots of unopened movies.
In the 1980s, video rental stores rented VHS and Beta tapes of movies, although most stores dropped Beta tapes when VHS won the format war late in the decade. In the early 2000s, video rental stores began renting DVDs, a digital format with higher resolution than VHS; DVDs eventually replaced videocassettes. Millions and millions of video rentals are also offered in other business such as grocery stores, drugstores or convenience stores.
Typically, a customer must sign up for an account with the shop and give a form of security such as a credit card number or driver's license. If the customer does not return the movie, the store can charge the cost of the movie to the customer's credit card. If items are returned late, the shop usually charges late fees, which typically accumulate day by day. Some shops have policies where instead of late fees, they will treat overdue items as a sale after a certain date, and charge a price equivalent to a standard sale of that object (with appropriate deductions for the rental fee already paid and for its pre-opened condition). When VHS and Beta tapes were the dominant form for video, rental shops also charged a fee for not rewinding the tape to the start before returning the video.
While video rental stores primarily offer movies, many also rent prerecorded TV shows, music CDs or video game cartridges and discs. Some video rental outlets use an automated kiosk or vending machine, with a credit card payment system, to dispense and collect rentals. Some video rental stores also sell snack items such as microwave popcorn, fried foods, pizzas, chips, cookies, peanuts, juices, ice-cream, candy, and soda pop.
The world's oldest business that rents out copies of movies for private use was opened by Eckhard Baum in Kassel, Germany in the summer of 1975. Baum collected movies on Super 8 film as a hobby and lent pieces of his collection to friends and acquaintances. Because they showed great interest in his films, he came up with the idea of renting out films as a sideline. Over the years, videotapes and optical discs were added to the range. Baum still operates the business as of September 2015 and was portrayed in the June 2006 documentary film "Eckis Welt" by Olaf Saumer.
The first professionally managed video rental store in the U.S. was opened by George Atkinson in December 1977 at 12011 Wilshire Boulevard in Los Angeles. After 20th Century Fox had made an agreement with Magnetic Video founder Andre Blay to license him 50 of their titles for sale directly to consumers, amongst them Butch Cassidy and the Sundance Kid, M*A*S*H, Hello, Dolly!, Patton, The French Connection, The King And I and The Sound Of Music, Atkinson bought all the titles in both VHS and Beta formats, and offered them for rent. Such stores led to the creation of video rental chains such as West Coast Video, Blockbuster Video,Rogers Video , and Family Videos in the 1980s.
By mid-1985 the United States had 15,000 video rental stores, and many record, grocery, and drug stores also rented tapes. Three years later, in May 1988, the number of video specialty stores was estimated to be 25,000, in addition to 45,000 other outlets that also offered video rentals. The press discussed the VCR "and the viewing habits it has engendered -- the Saturday night trip down to the tape rental store to pick out for a couple of bucks the movie you want to see when you want to see it". Video rental stores had customers of all ages and were part of a fast-growing business. By 1987, for example, Pennsylvania had 537 stores that primarily dealt in renting videotapes, with annual spending per resident of $10.50. Six years after its founding, Philadelphia's West Coast Video had by 1989 come to operate more than 700 stores in the US, Canada, and Britain. Also in 1987, the revenue taken in from the home video market surpassed box office revenues for that year.
In the 1980s, it was common for shops to rent equipment--typically VHS players--as well as tapes. Some video shops also had adults-only sections containing X-rated videos. To cope with the videotape format war of the 1970s and 1980s, some stores initially stocked both VHS and Betamax cassettes, while others specialized in one format or the other. During the 1980s most stores eventually became all-VHS, contributing to the eventual demise of Beta. In the late 1990s, DVDs began appearing in video rental stores. Rogers Video was the first chain to provide DVD rentals in Canada. Other chains and independent stores later transitioned to the newer format. Similarly, many stores now rent Blu-ray Disc movies after the high definition optical disc format war was finished in the late 2000s decade.
The widespread availability of video on demand on cable TV systems and VHS-by-mail services offered consumers a way of watching movies without having to leave their home. With the advent of the World Wide Web, Internet services such as Netflix have become increasingly popular since the mid-2000s. All of these new ways of watching movies have greatly reduced the demand for video rental shops, and many have closed down as a result. In 2000, there were 27,882 stores left, and in late 2015 it was 4,445. In 2017 it was reported that about 86% of 15,300 video stores that were open in the US in 2007 were closed, bringing the number down to about 2,140 remaining stores. The total income from brick and mortar rentals for 2017 was about $390 million.
The rental of books, CDs, tapes, and movies is covered by copyright law. Copyright owners sometimes put warning notices on the packaging of products such as VHS cassettes to deter copyright infringement. In some cases, the rights of consumers in Europe and the US are in fact significantly broader than described in such warnings.
There would typically be a delay of several months between the time a movie was available for rental, and when the movie could be purchased by the consumer. In reality, the video was available, but priced for rental shops and film enthusiasts who wanted to own a copy of the film at the earliest opportunity. The pricing was between $70 and $130. This started changing with the advent of movie releases on DVD. Blockbuster refused to use the VHS strategy for DVD, so the studios began releasing DVDs at an initially lower price. During 2008, retailers would have the DVD version of a film available for sale the same day the VHS version was available for rent. This later changed, with release dates for VHS and DVD coinciding. In 2013, this also occurred when the Blu-ray Disc format was introduced as the successor to VHS and DVD. A movie will be available on VHS, Blu-ray and DVD on the same day.
Some video rental shops put special security measures on the DVD or box which have to be deactivated by a clerk after a DVD is rented. With the use of scanner devices with alarms at the doors, this system prevents patrons from shoplifting DVDs.
In some rental stores the empty boxes are on the shelves, so that customers can see the poster and credits, but the actual media (VHS, DVD or video game disc) is kept behind the desk, therefore reducing any risks of theft (since the most someone can steal from the shelves is the box). The media is put into the box at the same time that the rent is signed. Or the case may be locked and can only be unlocked with a special instrument or tool kept behind the video shop counter.
In some countries, a vending machine and a credit card are required to rent the VHS material. In such cases, the card would be charged a refundable fee to cover the physical media cost if a renter did not return the DVD or game.