Video shops seek limit on fees for rental rights

PUBLISHED : Tuesday, 19 February, 2008, 12:00am
UPDATED : Tuesday, 19 February, 2008, 12:00am

Video-rental shops want the government to limit the fees film distributors charge them for rental rights.

Distributors want shops to pay them up to 100 per cent of a video disc's wholesale price each time they rent it out.

But a group representing rental shops says that would mean they had to charge up to HK$80 per rental. It says that if shops have to pay a fee of more than 30 per cent of a film's wholesale price, that would drive away customers - most of whom are too poor to buy films - and force more than nine in 10 rental shops out of business.

An amendment to the Copyright Ordinance, passed last year, entitles distributors to seek rental-rights fees, but the shops and the distributors have not agreed what the fee should be.

Lawmakers and government officials from the Commerce and Industry Bureau will today discuss implementing the measure.

The Hong Kong Video Development Fund, which represents 11 film distributors in the city, confirmed it was seeking a rental-rights fee equivalent to 30 to 100 per cent of the wholesale price of a disc.

Wong Kam-on, spokesman for the Rental Industry Alliance, which represents more than 150 of the 500-odd video-rental shops, said that if the fee were set at 100 per cent of a film's wholesale price, the charge for renting a VCD would rise from HK$6 to more than HK$40 and that for renting a DVD would rise from HK$13 to more than HK$80.

The figures assume a shop has revenue of HK$30,000 a month, pays a salary of HK$6,500 and generates a profit of HK$2,500.

'For poor families in Hong Kong, it's a luxury to buy a movie or go to the cinema for entertainment,' Mr Wong said.

'The rental shops enable them to have affordable entertainment ... they are irreplaceable. If shops have to increase their prices drastically, it's the consumers who will suffer.'

The alliance wants the government to bring together consumers, distributors and rental-shop representatives to agree over caps on the fees.

Emily Lau Wai-hing, leader of the political group The Frontier, who is helping the alliance, urged distributors and the government to work with the shops to find a solution that works for everyone.

But Kung Tak-man, spokesman for the Hong Kong Video Development Fund, said: 'We are the ones who pay for the copyright of the movies, and the rental shops have never paid anything for that. And who is to say what should be the right price for rental? It's a free market. Let the market set the price.'

A spokeswoman for the Commerce and Industry Bureau said it encouraged communication between the two sides.