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1064

How does Greencine make money
Topic by: Kari2742
Posted: August 19, 2004 - 5:21 PM PDT
Last Reply: August 23, 2004 - 4:34 PM PDT

page  1  2      prev | next
author topic: How does Greencine make money
Kari2742
post #1  on August 19, 2004 - 5:21 PM PDT  
Just wondering how Greencine makes money. Seems like it cost them a lot to send the DVD ( 60 cents on return trip, not sure how much on trip there )- plus the new packaging material. All those MIA discs etc...

21.95 for 3 out plan - its very possible for someone in the bay area or other parts of CA to rent 15 dvds or more. Although that REALLY is a lot of hours just watching dvds. :)
jross3
post #2  on August 19, 2004 - 6:35 PM PDT  
plus they make donations! this is a good question.
But I'm sure that there's a couple hundred folks west of the Sierras that just love to hoarde their discs. I usually don't hurry too much to watch my green-bar movies (no wait, no worry, right?), so I know they're making a profit from me, at least as far as postage goes.
Catullus
post #3  on August 19, 2004 - 6:42 PM PDT  
Ive wondered this myself, but then this month ive only sent dvds back once so far... so at least for this month GC is making $$$$ on my account.

Im sure they are thinking its about time.
NLee
post #4  on August 19, 2004 - 7:27 PM PDT  
The following should be added to GC's FAQ:

Q. How does Greencine make money?

A. We don't. We are losing money to gain market share. When the next Internet Boom comes, we will make millions in IPO by going public.
hamano
post #5  on August 19, 2004 - 11:18 PM PDT  
Or they're just trying to make themselves look good to be acquired by Google or AOL or maybe even Netflix! Anybody else wanna buy a boutique DVD rental company? Starbucks?
transom
post #6  on August 20, 2004 - 8:33 AM PDT  
> On August 19, 2004 - 5:21 PM PDT Kari2742 wrote:
> ---------------------------------
> Just wondering how Greencine makes money. Seems like it cost them a lot to send the DVD ( 60 cents on return trip, not sure how much on trip there )- plus the new packaging material. All those MIA discs etc...
>
> 21.95 for 3 out plan - its very possible for someone in the bay area or other parts of CA to rent 15 dvds or more. Although that REALLY is a lot of hours just watching dvds. :)
> ---------------------------------
Somebody told me the postage is a tax write-off.

kohnfused1
post #7  on August 20, 2004 - 9:00 AM PDT  
...they're still a business, so I would assume they get tax breaks as well, no? Even non-profit organizations get (financial) help from Uncle Sam.
Kari2742
post #8  on August 20, 2004 - 11:23 AM PDT  
> On August 20, 2004 - 9:00 AM PDT kohnfused1 wrote:
> ---------------------------------
> ...they're still a business, so I would assume they get tax breaks as well, no? Even non-profit organizations get (financial) help from Uncle Sam.
> ---------------------------------

wow , tax write off on the postage. That sounds pretty awesome.
woozy
post #9  on August 20, 2004 - 12:15 PM PDT  

> Somebody told me the postage is a tax write-off.
>
Tax write-off is awesome but it isn't the same thing as free. They still have to pay it.
SDChas
post #10  on August 20, 2004 - 5:37 PM PDT  
"Tax write-off"!!!!!!!! WOW!!!!

Drum-Roll .... Soap box time ......

It sounds like people have heard this term 'tax write-off' and think it is some magical way for rich people to get even richer. Because that is what the news makes it sound like. But the newscasters and newspapers are just trying to stir up emotions to gain listeners/readers. What is a 'tax write-off'? This is just deducting expenses before you calculate your profit. Of course the postage is an expense that becomes a tax deduction. So is the electric bill GC pays and the saleries of the employees. GC receives X dollars a year from its members. Then it deducts the cost of buying DVD's, postage, electric bill, saleries, office rent, etc. Then (if it is lucky) it ends up with a final profit of Y. GC then pays taxes on Y, after taking all these "tax write-offs" AKA deductions.


Yea, there are a couple of goofy loop-holes in the laws that allow people to cheat but these are few. One of them is to buy an antique at an auction for cheap. Then get some shady antique dealer to say it is worth a lot of money. Then donate the antique to a charity and claim the bogus worth as a deduction. The charity then has to sell this piece of junk for a few bucks to get anything. This plan can actually 'make' someone money, in that they end up with more money left after paying taxes then if they never bought the antique.





JBellows
post #11  on August 20, 2004 - 6:07 PM PDT  
Two words: PORN.

I shall sit down. thanks.
Scooter
post #12  on August 20, 2004 - 6:27 PM PDT  
> On August 20, 2004 - 6:07 PM PDT JBellows wrote:
> ---------------------------------
> Two words: PORN.
>
> I shall sit down. thanks.
> ---------------------------------


That's one word!
Shoulda said "PORN... and ANIME PORN"
lol
JBellows
post #13  on August 20, 2004 - 6:33 PM PDT  
Nope. One word. It's all in the wrist. Someday, you'll understand.
loucyphre
post #14  on August 21, 2004 - 1:13 PM PDT  
> On August 19, 2004 - 5:21 PM PDT Kari2742 wrote:

>
> 21.95 for 3 out plan - its very possible for someone in the bay area or other parts of CA to rent 15 dvds or more. Although that REALLY is a lot of hours just watching dvds. :)
> ---------------------------------


Oh, you have no idea how long someone - me, for instance, can spend, shying away from the daylight and social activity in order to watch movies. It's quite unsettling really.
RParson
post #15  on August 21, 2004 - 4:18 PM PDT  
Velcro is man's greatest invention. The calculator is a close second. I'm on the three outre plan. My average cost per rental is $2.40 per disk. Slightly less than going to my friendly neighborhood video store and renting new releases.

Robert
woozy
post #16  on August 21, 2004 - 4:49 PM PDT  
> 21.95 for 3 out plan - its very possible for someone in the bay area or other parts of CA to rent 15 dvds or more. Although that REALLY is a lot of hours just watching dvds. :)
> ---------------------------------

Greencines monthly accounting of heavy dvd watcher (15 disk/month):

Member fee: +$21.95
Postage: (15)@
$1.20 per disk -$18.00
Labor:
(filing, stuffing,
send, recieving)
18 @
.10 per disk -1.80
===
Balance $1.15

Greencine monthly accounting of a light dvd watcher (5/month):

Member fee: +$21.95
Postage: 5@ -6.0
Labor:5@ -0.50
Balance: $15.45

Greencine monthly accounting of an average user (8 1/2 /month):

Member fee: $21.95
Postage: -10.20
Labor: -0.85
Balance: $10.90

Number of users a month: roughly 10,000

Revenue a month: $100,900.00.

Now I have no idea what the expenses of running the business are but as long as they are under $100K a month they are turning a profit.



jross3
post #17  on August 21, 2004 - 7:31 PM PDT  
15/month doesn't seem that heavy; that's only one every other night. On 8 out I can easily beat that. But then, I pay 60-some dollars a month now, so GC's just fine with me I guess.
jross3
post #18  on August 21, 2004 - 7:32 PM PDT  
> On August 21, 2004 - 7:31 PM PDT jross3 wrote:
> ---------------------------------
> 15/month doesn't seem that heavy; that's only one every other night. On 8 out I can easily beat that. But then, I pay 60-some dollars a month now, so GC's just fine with me I guess.
> ---------------------------------

I mean, 10-out. I'm on 10-out, that way I can watch one or two a night most of the time. 8-out is 50 or something...
woozy
post #19  on August 21, 2004 - 8:38 PM PDT  
My calcutions on 15 a month were based on the 3-out plan ($21.95 /month) in which case 15 is heavy. That would mean 5 turn around periods in a month which would be about five day turn around (no sundays). Three days is the bare minimum which occurs only if disk is recieved the day after it's sent, watched the day its recieved, sent back the day after its watched and a new one sent the day it's recieved.

20 in a month with the 10 plan is not have but they are making $60/month off you.

GC is a good deal and its profits are slim but they aren't unbelievable if you do the math.
Cinenaut
post #20  on August 23, 2004 - 3:54 PM PDT  
I think I generally get 12 a month on the 3 out plan.
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