When he reads reports of such television advances as ultra high frequency and improved color telecasts, the average U.S. householder is less likely to glow with enthusiasm than he is to blanch at the prospect of buying a costlier new set. Not so in Britain, where more and more fans now rent their TV sets. Of the 12 million television sets operating in Britain, half are rented. Of new sets installed, 80% are now rented, compared with 10% a dozen years ago.
A Matter of Equity. The British believe that rented television has notable advantages, even for those who could well afford to buy. Rental companies carry a wide variety of sets (one firm offers a choice of 32 new models at rentals ranging from $4.20 to $8.40 a month and 17 used models at even lower rates). The monthly rent that a "subscriber" pays is reduced every six months for the first few years that he continues to keep a set, and discounts are given for advance payment. Best of all, subscribers have no difficulty getting faulty sets repaired or replaced at no charge. The larger rental companies maintain mobile repair vans with parts, test benches and generators; one firm handles 30,000 service calls a week. Says a satisfied London renter: "By the time you've finished buying a set on hire-purchase,* it isn't worth anything anyway. You have no equity. What's the sense of it?"
With so many Englishmen eager to rent, more than a hundred companies have gone into television rentals. But because sets turn no profit until they have been rented for at least a year, large capital is required and 90% of the business is handled by six big firms. Largest of all is the pioneer in the field, Radio Rentals Ltd. Founded 32 years ago by Chairman Percy Perring-Thoms as a one-shop operation renting radios for 35¢ a week, Radio Rentals expanded into television just before World War II. Today the company has 750,000 subscribers and 310 sales offices, manufactures all its own rental sets through a subsidiary called Baird Television Ltd. With profits last year of $4,612,000, Radio Rentals is about to become even bigger by absorbing (for $4,200,000) E. D. Dawes Co., a smaller rental company with 60 outlets in the north of England.
Reverse Flow. Because British business has borrowed so many sales techniques from the U.S., most Britons take it for granted that TV rentals are also widespread in this country. "You mean you don't have it in America?" said one astonished Englishwoman. "I assumed we'd got it from you." In fact, out of 56 million U.S. TV sets, scarcely 500,000 are rented, and these are mostly in hotels and motels. But the idea is budding: Hertz started renting home sets in New York last December, reports triple the volume that it originally anticipated.
* British for the installment plan.