Photo by Ross Catrow

A reader asked:

Hello my name is Rolando, I want to ask you for your help. My friend and I are thinking about starting a video rental business that we are going to run it something like Netflix. We’ll charge a small fee every month to our members to see DVDs on the computer. Do I need to get a licenses for this? If so what kind of licenses do I need? We are going to have a web page with over 1,000 movies and for a fee the member can see as much as they want. Is this a legal please let me know and thank you for your help.

In the closing credits of a movie, it will usually tell you who to contact to negotiate licensing arrangements. In those very same closing credits, you will see a statement saying that broadcasting the video (or TV show) in any form is illegal and will usually be prosecuted to the fullest extent of the law. Make sure you negotiate an agreement before you stream anything.

According to BusinessOfVideo.com, streaming licenses can be anywhere from pennies per play to $4 per movie per play. They added “One of the major reasons that Netflix does not have a lot of new content in their streaming offering is the fact that the licensing costs for new content is so high. Studios are still greedy and Netflix simply can’t afford to pay the costs associated with first run movies.”

Photo by Ross Catrow.

 

Originally posted by Dane Carlson on February 21, 2011 in Ask the Readers / bizopy.

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