<PAGE>

                                                                    EXHIBIT 10.4

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
     WITHOUT REGISTRATION OR QUALIFICATION UNDER THE SECURITIES ACT OF
     1933, AS AMENDED (THE "SECURITIES ACT"), AND THE BLUE SKY LAWS OF
     ANY JURISDICTIONPreferred CustomerFinancial Printing GroupTHE
     SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
     WITHOUT REGISTRATION OR QUALIFICATION UNDER THE SECURITIES ACT OF
     1933, AS AMENDED (THE "SECURITIES ACT"), AND THE BLUE SKY LAWS OF
     ANY JURISDICTION. SUCH SECURITIES MAY NOT BE SOLD, ASSIGNED,
     TRANSFERRED OR OTHERWISE DISPOSED OF, BENEFICIALLY OR ON THE
     RECORDS OF THE COMPANY, UNLESS THE SECURITIES REPRESENTED BY THIS
     CERTIFICATE HAVE BEEN REGISTERED OR QUALIFIED UNDER THE
     SECURITIES ACT AND APPLICABLE BLUE SKY LAWS OR THERE HAS BEEN
     DELIVERED TO THE COMPANY AN OPINION OF COUNSEL, SATISFACTORY TO
     THE COMPANY, TO THE EFFECT THAT SUCH REGISTRATION AND
     QUALIFICATION IS NOT REQUIRED.


                  THE TRANSFER OF THIS WARRANT IS RESTRICTED
                        AS PROVIDED IN SECTIONS 7 AND 8

--------------------------------------------------------------------------------


                              WARRANT CERTIFICATE
                     TO PURCHASE SHARES OF COMMON STOCK OF
                               VIDEO CITY, INC.

     Video City, Inc., a Delaware corporation (the "Company"), grants to Mortco
Inc., an Oregon corporation ("Mortco") the right, subject to the terms and
conditions of this Warrant, to purchase at any time during the period commencing
on the date hereof and ending on March 31, 2004 (the "Expiration Date"), for an
aggregate purchase price of $1,500,000 (the "Aggregate Exercise Price"), 500,000
shares of the Company's Common Stock.  The number and character of shares that
may be purchased upon exercise of this Warrant and payment of the Aggregate
Exercise Price are subject to adjustment from time to time as hereinafter
provided.  This Warrant is being issued pursuant to the Agreement of Merger and
Plan of Reorganization, dated as of March 30, 1999, between the Company, Video
Galaxy, Inc. and James G. Howard, George M. Peloso and Kurt Peterson (the
"Merger Agreement").

     Section 1.  Definitions.  As used in this Warrant, unless the context
otherwise requires:

          1.1     "Aggregate Exercise Price" is defined in the first paragraph
of this Warrant.

          1.2     "Common Stock" means all classes of common stock of the
Company.


Page 1 - WARRANT CERTIFICATE
<PAGE>

          1.3     "Company" is defined in the first paragraph of this Warrant.

          1.4     "Exercise Date" means the date when this Warrant is exercised
in the manner indicated in Section 2.2.

          1.5     "Exercise Period" means the period commencing on the Grant
Date and ending on the Expiration Date.

          1.6     "Exercise Price" means the price per Warrant Share, which is
determined by dividing the Aggregate Exercise Price by the number of shares of
Common Stock issuable upon the exercise of this Warrant.

          1.7     "Expiration Date" is defined in the first paragraph of this
Warrant.

          1.8     "Grant Date" is the date of the Effective Time (as defined in
the Merger Agreement).

          1.9     "Holder" means initially Mortco and its subsequent
transferees.

          1.10    "Mortco" is defined in the first paragraph of this Warrant.

          1.11    "Related Warrant" means any other Warrant executed and
delivered by the Company on terms identical with the terms of this Warrant
(except as to the identity of Holder, number of Warrant Shares or execution
date) that is granted pursuant to Section 6 of this Agreement.

          1.12    "Related Warrant Shares" means any shares of Common Stock or
other securities issued or issuable upon exercise of any Related Warrant.

          1.13    "Rentrak" is defined in the first paragraph of this Warrant.

          1.14    "Securities Act" means the Securities Act of 1933, as amended
from time to time, and all rules and regulations promulgated thereunder, or any
act, rules or regulations that replace the Securities Act or any such rules and
regulations.

          1.15    "Warrant" means this Common Stock Warrant and each previously
executed and cancelled Common Stock Warrant, if any, for which this Warrant has
been exchanged.

          1.16    "Warrant Shares" means any shares of Common Stock or other
securities issued or subject to issuance upon exercise of this Warrant or upon
exchange of a Warrant Share for Warrant Shares of different denominations.


Page 2 - WARRANT CERTIFICATE
<PAGE>

     Section 2.  Duration and Exercise of Warrant; Computation of Shares.

          2.1     Vesting. This Warrant shall vest in its entirety on the Grant
Date and expire on the Expiration Date.

          2.2     Exercise of Warrant; Issuance of Shares.  This Warrant is
immediately exercisable by Holder, in whole or in part, at any time during the
Exercise Period.  Holder may exercise this Warrant during the Exercise Period by
(i) surrendering this Warrant to the Company; (ii) tendering to the Company the
payment due with regard to the Aggregate Exercise Price applicable to the number
of Warrant Shares being acquired by Holder; and (iii) executing and delivering
to the Company the attached Exercise Form.

          Upon exercising this Warrant, the Company shall issue to Holder that
number of Warrant Shares for which the Warrant is being exercised, together with
such additional number of shares of capital stock or other securities or
property (other than cash) distributed by the Company from time to time after
the Grant Date of this Warrant with respect to the Common Stock which Holder
would have received had Holder exercised the Warrant immediately prior to the
distribution or issuance of any such shares, securities or property by the
Company with respect to the number of shares of Common Stock received upon
exercise of this Warrant.

          2.3     Certificates. Within a reasonable time, but no more than
fifteen (15) days after exercise, the Company shall deliver certificates for all
Warrant Shares to Holder.

          2.4     Securities Act Compliance. Unless the issuance or transfer of
the Warrant Shares shall have been registered under the Securities Act, as a
condition of its delivery of the certificates for the Warrant Shares, the
Company may require Holder (including any transferee of the Warrant Shares in
whose name the Warrant Shares are to be registered) to deliver to the Company,
in writing, representations regarding the purchaser's sophistication, investment
intent, acquisition for its own account and such other matters as are reasonable
and customary for purchasers of securities in an unregistered private offering,
and the Company may place conspicuously upon each certificate representing the
Warrant Shares a legend substantially in the following form, the terms of which
are agreed to by Holder (including such transferee):

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
     WITHOUT REGISTRATION OR QUALIFICATION UNDER THE SECURITIES ACT OF
     1933, AS AMENDED (THE "SECURITIES ACT"), AND THE BLUE SKY LAWS OF
     ANY JURISDICTION. SUCH SECURITIES MAY NOT BE SOLD, ASSIGNED,
     TRANSFERRED OR OTHERWISE DISPOSED OF, BENEFICIALLY OR ON THE
     RECORDS OF THE COMPANY, UNLESS THE SECURITIES REPRESENTED BY THIS
     CERTIFICATE HAVE BEEN REGISTERED OR QUALIFIED UNDER THE
     SECURITIES ACT AND APPLICABLE BLUE SKY LAWS OR THERE HAS BEEN
     DELIVERED TO THE COMPANY AN OPINION OF COUNSEL, SATISFACTORY TO
     THE COMPANY, TO THE EFFECT THAT SUCH REGISTRATION AND
     QUALIFICATION IS NOT REQUIRED.

The Company need not register a transfer of this Warrant or the Warrant Shares
unless the


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<PAGE>

conditions specified in this legend and in Section 8 are satisfied.

     Section 3.  Validity and Reservation of Warrant Shares. The Company
covenants and warrants that this Warrant and any Warrant Shares will be validly
issued, fully paid, nonassessable and free of preemptive rights. The Company
agrees that so long as this Warrant may be exercised, the Company will have
authorized and reserved for issuance upon the exercise of this Warrant a
sufficient number of Warrant Shares to provide for exercise in full.

     Section 4.  Fractional Shares. No fractional Warrant Share shall be issued
upon the exercise of this Warrant. With respect to any fraction of a Warrant
Share otherwise issuable upon any such exercise, the Company shall pay to Holder
an amount in cash equal to such fraction multiplied by the Exercise Price.

     Section 5.  Limited Rights of the Warrant Holder. Holder shall not, solely
by virtue of being the holder of this Warrant, have any of the rights of a
holder of Common Stock of the Company, either at law or equity, until such
Warrant shall have been exercised and Holder shall have been issued certificates
representing the Warrant Shares and Holder shall be deemed to be the holder of
record of Warrant Shares as provided in this Warrant, at which time the person
or persons in whose name or names the certificate or certificates for Warrant
Shares being purchased are to be issued shall be deemed the holder or holders of
record of such shares for all purposes.

     Section 6.  Adjustments Upon Certain Events.

          (a)     If this Warrant shall be exercised subsequent to any stock
     split, stock dividend, recapitalization, combination of shares of the
     Company, or other similar event, occurring after the date hereof, then the
     Holder exercising this Warrant shall receive upon the exercise of this
     Warrant and payment of no additional consideration other than the Aggregate
     Exercise Price applicable to the number of Warrant Shares being acquired,
     the aggregate number and class of shares which such Holder would have
     received if this Warrant had been exercised immediately prior to such stock
     split, stock dividend, recapitalization, combination of shares, or other
     similar event. If any adjustment under this Section 6(a), would create a
     fractional share of Common Stock or a right to acquire a fractional share,
     such fractional share shall be disregarded and the number of shares subject
     to this Warrant shall be the next higher number of shares, rounding all
     fractions upward. Whenever there shall be an adjustment pursuant to this
     Section 6(a), the Company shall forthwith notify the Holder or Holders of
     this Warrant of such adjustment, setting forth in reasonable detail the
     event requiring the adjustment and the method by which such adjustment was
     calculated.

          (b)     If this Warrant shall be exercised subsequent to any merger,
     consolidation, exchange of shares, separation, reorganization, sale of all
     or substantially all of the Company's assets, liquidation of the Company,
     or other similar event, occurring after the


Page 4 - WARRANT CERTIFICATE
<PAGE>

     Grant Date, as a result of which shares of Common Stock shall be changed
     into the same or a different number of shares of the same or another class
     or classes of securities of the Company or another entity or are otherwise
     entitled to receive shares of stock or other securities or property, then
     the Holder exercising this Warrant shall receive, upon the exercise of this
     Warrant and payment of no additional consideration other than the Aggregate
     Exercise Price applicable to the number of Warrant Shares being acquired,
     the aggregate number and class of shares or other property which such
     Holder would have received if this Warrant had been exercised immediately
     prior to such merger, consolidation, exchange of shares, separation,
     reorganization, sale of all or substantially all of the Company's assets,
     or liquidation, or other similar event. If any adjustment under this
     Section 6(b) would create a fractional share of Common Stock or a right to
     acquire a fractional share of Common Stock, such fractional share shall be
     disregarded and the number of shares subject to this Warrant shall be the
     next higher number of shares, rounding all fractions upward. Whenever there
     shall be an adjustment pursuant to this Section 6(b), the Company shall
     forthwith notify the Holder or Holders of this Warrant of such adjustment,
     setting forth in reasonable detail the event requiring the adjustment and
     the method by which such adjustment was calculated. The above provisions of
     this Section 6(b) shall apply to successive events described above.

     Section 7. Exchange, Transfer or Loss of Warrant.

          7.1     Exchange. This Warrant is exchangeable, without expense to
Holder and upon surrender hereof to the Company, for Related Warrants of
different denominations entitling Holder to purchase Related Warrant Shares
equal in total number and identical in type to the Warrant Shares covered by
this Warrant.

          7.2     Transfer.  Subject to the provisions of Section 8, upon
surrender of this Warrant to the Company with the attached Assignment Form duly
executed, the Company shall, without charge, execute and deliver a Related
Warrant to the assignee named in such Assignment Form, and this Warrant shall
promptly be cancelled.

          7.3     Loss, Theft, Destruction or Mutilation. Upon receipt by the
Company of satisfactory evidence of the loss, theft, destruction or mutilation
of this Warrant and either (in the case of loss, theft or destruction)
indemnification or bond in form and substance acceptable to the Company, or (in
the case of mutilation) the surrender of this Warrant for cancellation, the
Company will execute and deliver to Holder, without charge, a Related Warrant of
like denomination. Any such Related Warrant executed and delivered shall
constitute an additional obligation of the Company, whether or not this Warrant,
reportedly lost, stolen, destroyed or mutilated, shall be at any time presented
by anyone to the Company for exercise.

     Section 8. Transfer Restriction.

          8.1     General.  Anything contained hereto to the contrary
notwithstanding, this


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<PAGE>

Warrant may not be assigned, transferred (by operation of law or otherwise),
hypothecated or sold (other than to Rentrak or a wholly-owned subsidiary of
Rentrak), except as set forth in Section 8.2. Any such assignment or transfer
shall be made by surrender of this Warrant to the Company or at the office of
its transfer agent, if any, with the Form of Assignment annexed hereto duly
executed and funds sufficient to pay any transfer tax, whereupon the Company
shall, without charge, execute and deliver a Related Warrant in the name of the
assignee and this Warrant shall promptly be cancelled.

          8.2     Securities Law Compliance. Except pursuant to the requirements
of Rule 144 of the Securities Act, the Warrant and Warrant Shares may not be
sold, transferred, assigned or otherwise disposed of except as follows:

          (a)     to a person who, in the opinion of counsel satisfactory to the
     Company and in the opinion of the Company's counsel, is a person to whom
     the Warrant or Warrant Shares may legally be transferred without
     registration under the Securities Act and without the delivery of a current
     prospectus with respect thereto; or

          (b)     to any person upon delivery of a prospectus then meeting the
     requirements of the Securities Act relating to such securities (as to which
     a registration statement under the Securities Act shall then be in effect)
     and the offering thereof for such sale or disposition.

     Holder agrees that it will not at any time offer to sell, sell, transfer,
pledge or otherwise dispose of this Warrant, or, upon receipt of the Warrant
Shares after exercise hereof, any of such Warrant Shares, except pursuant to
either (a) an effective registration statement under the Securities Act or (b)
an opinion of counsel reasonably satisfactory to the Company to the effect that
such registration is not required.  Holder acknowledges that, in taking this
unregistered Warrant, or in taking unregistered Warrant Shares upon exercise
hereof, Holder must continue to bear the economic risk of such investments for
what may be an indefinite period of time.  Holder further agrees hereby that,
prior to any transfer of this Warrant or any Warrant Shares received upon any
exercise hereof (if such Warrant and/or Warrant Shares are not registered under
the Securities Act), it will give written notice to the Company of its intention
to effect such transfer.  Upon receipt of such notice, the Company will promptly
present it to counsel for the Company and counsel for Holder and if the Company
receives the opinion of such counsel, in form and substance satisfactory to the
Company, that the proposed transfer may be effected without registration under
the Securities Act and applicable state law, Holder shall be promptly notified
and shall be entitled to effect the transfer of this Warrant and/or the Warrant
Shares in accordance with the terms specified in the notice delivered to the
Company.  The provisions of this Section 8.2 shall be binding upon all
subsequent Holders of this Warrant and upon all subsequent holders of the
certificates for the Common Stock bearing the legend specified in Section 2.5
hereof.

          8.3     Representations of Holder. Holder represents that it has
acquired this

Page 6 - WARRANT CERTIFICATE
<PAGE>

Warrant for investment purposes only, for its own account, and not with any
present view to, or any offer to sell in connection with, the distribution
thereof.  Holder represents that it is an "accredited investor" as that term is
defined under Regulation D of the Securities Act.

     Section 9. Representations and Warranties.  The Company represents and
warrants to Rentrak the following:

          9.1     Authority.  The Company has full right, power and authority to
enter into this Agreement and to perform all of its obligations hereunder or
contemplated hereby; this Agreement has been duly authorized, executed and
delivered by the Company and is enforceable in accordance with its terms.

          9.2     Valid Agreement.  This Warrant, and the issue and delivery
thereof has been duly and validly authorized, and this Warrant, when issued and
delivered as provided in this Agreement, will be duly and validly issued and
outstanding, and will constitute a valid and binding obligation of the Company.

     Section 10.  Registration Rights.  The Warrant Shares are hereby granted
and shall have all of the registration rights granted to Mortco under that
certain Registration Rights Agreement, dated as of the date hereof (the "Rights
Agreement"), by and between Mortco and the Company, the terms of which are
incorporated herein by this reference as if fully set forth herein; provided,
                                                                    --------
however, that (a) the term "Shares" used in the Rights Agreement shall mean the
-------
Warrant Shares, (b) the term "Mortco" used in the Rights Agreement shall mean a
Holder as defined herein, and (c) the term "Agreement" used in the Rights
Agreement shall mean this Warrant.

     Section 11.  Miscellaneous.

          11.1    Successors and Assigns.  All the covenants and provisions of
this Warrant that are by or for the benefit of the Company shall bind and inure
to the benefit of its successors and assigns hereunder.

          11.2    Notice.  Notice or demand pursuant to this Warrant to be given
or made by Holder to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed, until another address is
designated in writing by the Company, as follows:

          Video City, Inc.
          370 Amapola Avenue, Suite 208
          Torrance, California 90501
          Attention:  Robert Y. Lee

Any notice or demand authorized by this Warrant to be given or made by the
Company to or on

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<PAGE>

Holder shall be given to Holder by first-class mail, postage prepaid, addressed,
until another address is designated in writing by the Company, as follows:

          Rentrak Corporation
          One Airport Center
          7700 N.E. Ambassador Place
          Portland, OR  97220
          Attention:  Ron Berger

and to any other Holder addressed at his last known address as it shall appear
on the books of the Company, until another address is designated in writing,
with a copy to Rentrak Corporation by like mail.

          11.3    Applicable Law.  The validity, interpretation and performance
of this Warrant shall be governed by the laws of the State of Oregon. For any
action related to the judicial enforcement or interpretation of this Agreement,
the parties hereby expressly submit themselves to the exclusive jurisdiction of
the Circuit Court for the County of Multnomah, State of Oregon or the Federal
Court for the District of Oregon.

          11.4    Headings.  The article headings herein are for convenience
only and are not part of this Warrant and shall not affect the interpretation
thereof.

     This Warrant is executed as of March 31, 1999.

AGREED AND ACCEPTED:

COMPANY:                             MORTCO:

Video City, Inc.                     Mortco, Inc.


By: /s/Tim Denari                    By: /s/ Ron Berger
   -------------------------------      -----------------------------
     Tim Denari, Chief Financial          Ron Berger, President
       Officer

Page 8 - WARRANT CERTIFICATE
<PAGE>

                                 EXERCISE FORM

      (To Be Executed by the Warrant Holder if the Warrant is Exercised)


TO:   VIDEO CITY, INC.

The undersigned
               -----------------------------------------------------------------
               (Please insert name and Social Security or other identifying
                number of Subscriber)

hereby irrevocably elects to exercise the right of purchase represented by the
attached Warrant for, and to purchase thereunder, __________ shares of the
Company's Common Stock which, and tenders payment herewith to the order of Video
City, Inc., in the amount of $___________.

The undersigned requests that certificates for such shares of Common Stock be
issued as follows:

Name:
     ---------------------------------------------------------------------------

Address:
        ------------------------------------------------------------------------

Deliver To:
           ---------------------------------------------------------------------

Address:
        ------------------------------------------------------------------------

Note:  Signature must correspond with the name as written upon the face of the
Warrant in every particular, without alteration or enlargement or any change
whatever.

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<PAGE>

                              FORM OF ASSIGNMENT

                      (To Be Signed Only Upon Assignment)


     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto           [name]          , of           [address]          , the right to
     --------------------------     -----------------------------
purchase __________ shares of Common Stock evidenced by the within Warrant, and
appoints           [name]           to transfer the same on the books of Video
         --------------------------
City, Inc., with the full power of substitution in the premises.

Dated:                         Signature:
      ------------------------           --------------------------------------


Note:  Signature must correspond with the name as written upon the face of the
Warrant.

Page 10 - WARRANT CERTIFICATE