Video rental wrangle resolved as film distributors lower demands

PUBLISHED : Tuesday, 26 February, 2008, 12:00am
UPDATED : Tuesday, 26 February, 2008, 12:00am

A dispute over movie rental fees appeared to be resolved yesterday when film distributors agreed to lower their wholesale charges to video rental shops.

This has also given the green light to gazetting of copyright legislation this week.

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

Rental shop owners feared they would need to increase their prices drastically, which could have driven away customers. Distributors have now agreed to cut the fee to up to 30 per cent of the wholesale price after meeting with government officials and rental shop representatives. That price structure will stay the same for a year. Distributors will review copyright fee levels at that time to see if consumers can bear them.

Wong Kam-on, spokesman for the Rental Industry Alliance, which represents more than 150 of the city's 500-odd video rental shops, welcomed the decision.

'We're surprised that the distributors have responded to our requests. It's quite dramatic as we've had conflicting opinions before,' Mr Wong said.

He estimated that video rental shops would need to increase prices by 20 per cent to cover the rise in costs. He said he believed most consumers could afford the increase.

The agreement paves the way for copyright legislation allowing distributors to seek rental-right fees from April 25. The amendment to the Copyright Ordinance was passed last year.

The 11 film distributors have also waived the HK$9,100 deposit for a rental licensing scheme. But video rental shops must pay a one-off fee of HK$1,000 to enrol in the system. The distributors also promised to issue sufficient copies of videos.

The Hong Kong Video Development Fund could not be reached for comment last night.