2009-10 Consumer Choices: Movie Rentals
Teacher Guide for Senior Levels
Situation
The technology changes in the last few years have had an impact on the movie
rental industry, and there are now many cost effective ways to rent DVDs. For
young people renting movies for the first time, this might be a difficult process
and it is important that they are not wasting money on unnecessary late fees or
membership fees. Using movie rentals as an example, students can be taught the
lesson of cost comparison, which can be a useful money management tool for
years to come. Middle school students have several options available to them,
including online rental memberships, one stop movie rental chains, and kiosks.
This guide will help youth make informed decisions about what type of movie
rental option they should utilize, and also help them to compare the costs and
advantages and disadvantages of all options.
Goal
 Enable youth to make informed decisions regarding how and where they
rent movies, as well as be able to defend their decision given a particular
consumer situation.
Materials Needed
 Consumer Choices Member Guide for each participant
 Teacher’s Guide with background information and suggested activities
(includes worksheets).
 Information from local movie rental stores containing their rates, as some
stores are franchised and the numbers may be different.
 Calculators and writing utensils for the students. (optional)
Objectives: For program participants to:
 Understand the importance of cost comparison regarding movie rentals.
 Understand the basics of membership fees.
 Be able to choose a company that fits their needs.
Key Concepts to Teach
 Cost comparison and value is important to everyone, no matter how young
or old.
 The rental account will need to have a debit or credit card on file. If the
student does not have their own debit or credit card, they will need to have
their parents’ permission to use their card to rent movies.
 Different movie rental services are appropriate for different people, based
on the individual’s needs and wants.
 It is important to shop around at stores or online distributors to make sure
that consumers choose the right service to fit their specific needs.
Preparation
 Research movie rental rates for stores in your area, as some stores are
franchised and may have different rental fees and late fee penalties. Ask for
information regarding late fees, membership fees, and movie availability. It
is important to find out whether youth can open up their own account or if
they need to be added to their parents’ existing account. (Note: The
numbers provided for the Blockbuster examples are from a franchised
store. These numbers will vary from store to store.)
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 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 car.
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 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.
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 the screen, it will ask you for a 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.
Suggested Activities
1. Advantages and Disadvantages. Have students use the Activity 1 Worksheet
to identify what they perceive to be the advantages and disadvantages of
each one, and they should be able to defend their decision.
2. Using the Activity 2 Worksheet, have youth calculate the cost of each movie
rental option presented.
References
1. Netflix: How it Works. http://www.netflix.com/HowItWorks
2. Red Box: How it Works. http://www.redbox.com/HowItWorks.aspx
3. Redbox’s Vending Machines are Giving Netflix Competition.
http://www.nytimes.com/2009/06/22/business/media/22redbox.html
4. Information about renting from Blockbuster. www.blockbuster.com
5. Information about Blockbuster Online.
https://www.blockbuster.com/signup/y/reg
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, Red Box, and Pay-perView. Be prepared to explain why you think each item is an advantage or
disadvantage. (Some possible answers have been filled in).
Advantages
-Unlimited rentals per month
-Watch unlimited on computer
Internet Movie -Biggest selection of the three
companies
Rentals
Movie Rental
Store
Pay-per-View
Movie Rental
Kiosk
-Get movie immediately
-Wide Selection
-Rent up to 8 at a time
-Watch a movie unlimited
number of times
-Don’t have to travel to a store
-Watch movie immediately
-No extra charge for Blu-ray
-Get movie immediately
-Return movie to any Red Box
-Many locations to rent from
-Unlimited number of rentals
Disadvantages
-Charge extra for Blu-ray
-Takes a day to get the movie
-Limited number you can check
out at a time
-Monthly fee no matter how
many movies you rent
-Charge extra for Blu-ray
-Have to return to same store
-Need membership
-Expensive per rental cost
-High late fee cost
-Only have 24 hours to watch
-Must have a compatible cable
or satellite provider
-Might not have Blu-ray option
-Small selection
-Limited number of each movie
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
 $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
Blockbuster Online
Netflix
Option #1 Cost $8.99
per month ($3 extra for
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.
store return option)
With this plan, you can
check out one movie at
a time and exchange
each DVD as often as
you want.
Option #2) Costs $13.99 Option #2) Costs $13.99 per
month + $3 for the Blu-ray option
per month ($3 extra for
With this plan, you can check out
store return option)
With this plan, you can
check out two movies at
a time and exchange
each DVD as often as
you want.
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
Option #3) Costs $15.99 month + $4 for the Blu-ray option
per month ($3 extra for
With this plan, you can check out
store return option)
With this plan, you can
check out three movies
at a time and exchange
each DVD as often as
you want.
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 six movies from the Red Box. He will have the one of the movies
for two days, three of the movies for three days, and two of the movies for six
days. How much will Red Box bill him for all of the movies?
Answer:
(1 x 2) + (3 x 3) + (2 x 6) = $23
2) Brad is trying to decide which video rental options is a better deal, renting his
movies next month from Blockbuster in the store or getting a one month
subscription to Blockbuster Online. If he goes with the in store option, he will rent
3 new release Blu-ray movies and a new release regular DVD format that will be
returned 2 days late. If he goes with Blockbuster Online, he will get 3 Blu-ray
movies and the regular DVD format one at a time and must be able to return
them to a store. Which will cost him less?
Answer: Blockbuster Online
Blockbuster: (3 x $5.75) + $4.75 + (2 x $2.26) = $26.52
Blockbuster Online: $8.99 + $3 in store return = $11.99
3) Jenny wants to rent three new release movies from the Blockbuster store, two
are new release Blu-ray movies, and the other is a regular format DVD. One of the
Blu-ray movies and the one regular format will be returned by mail two days late.
Compute the average cost for the three DVDs.
Answer:
($5.75 x 2) + ($4.75) + ($2.26 x 4) = $25.29
$25.29/3 = $8.43
Practice –Senior Consumer Situation for Movie Rentals
Stanley is leaving for a trip on Monday and will return on Wednesday. Stanley
wants to rent three newly released movies for his vacation. He wants to get the
best deal with the money he has to spend and is looking for rental options that
fits with his trip. Any movies that are rented would be returned the day he gets
back in town. Help him choose the best way to rent the three movies that fit his
needs. Rank them in order from 1 (best choice) to 4 (least desirable choice).
1. Netflix
Cost is $15.99 per month membership fee for unlimited movies that are checked
out up to three at a time. The movies arrive in the mail in one day and after the
movies are returned, he can rent as many others as he wants for the rest of the
month.
2. 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.
There is no membership fee.
3. 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. There is a
Red Box kiosk rental about 5 miles from Stanley’s home and 10 miles from where
he will be staying on vacation. Movie rentals may be return to any Red Box kiosk.
4. 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.
Placings: 3-2-1-4
#1) Red Box is first because it is the most cost-effective choice out of all four
choices. Even though he would be charged for 2 days of rental, it will still come
out less than all of the other choices. Plus, he does have the option of returning
them while on vacation if he wants to. Also, he doesn’t have to pay for
membership and there is no limit to how many he can rent.
#2) Blockbuster is second because it is next lowest in price. He can rent the videos
for the 2 days he’s on vacation without paying late fees as long as he returns
them on Wednesday.
#3) Netflix is the third best option for Stanley. If he rents the videos the week
before, he will get them in time to leave for his vacation. While the plan is
expensive, he can watch them as many times as he wants and also has the option
to rent an unlimited amount of movies for the rest of the month.
#4) DirecTV is last because it does not fit in with his travel requirements at all. He
would only be allowed to watch them on his TV at home, and this doesn’t make
sense because he is traveling on vacation.
1
2.
3.
4.