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Isn't video rental (in the US) done under first sale doctrine[1]? That means copyright holders only receive money from selling each physical copy.

[1] http://en.wikipedia.org/wiki/First-sale_doctrine



That's right, but they wouldn't necessarily have to (strictly speaking) sell copies. They could instead license the right to make copies for a fee.

My suspicion is that that fee would be set to extract as much money as possible from the rental stores (cf. Netflix) and that they are/were better off with the status quo.




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