EVOLUTION IN MOVIE RENTAL - Blockbuster Video to Close 20% of its Stores!
ONCE-MIGHTY VIDEO CHAIN CONTINUES TO STRUGGLE AGAINST MORE-AGILE COMPETITORS!
I'm old enough to remember the early days of video rental!
Back in the early 1980's, it was such a thrill to rent a movie and watch it on your schedule. These were the days of Video Tape, and VCR's, and movies in a tape cassette a bit larger in size than your typical trashy paperback novel.
The Video Tape Players were expensive, too - many approaching $1,000. And most had mechanical plastic parts, that broke easy. My first one had a wired remote, with a long cable extending across the living room floor, from the TV Set to the Couch.
And, a few goofs had a tapes and players in this odd Sony Format called - "BetaMax!' Man, I must be old!
How did you find your movies to rent?
Mostly, you went to some neighborhood video store. Popular movies in front, and the best ones were always checked out. They cost about $4.00 per night to rent.
Want something more risqué? You had to head behind the beaded curtain into the "Adult Section," often covering your face so your neighbors wouldn't see you.
In walked Blockbuster Video. Stores were well lit. Painted white. No blue movies here. Family Fare, as well as dozens of copies of the latest-available videos. Keep them for two days, not just one, and don't pay any late charges.
Nirvana! The chain grew, and grew, and grew - all across the U.S.
Well, today, the venerable video chain has fallen on hard times!
Faced with newer, nimbler rivals like Netflix, and Redbox, today's rental DVD buyers can order multiple movies for quick delivery through the mail, for a flat monthly fee. Netflix is beginning to offer many movies via online broadband video stream, while Redbox is placing its small DVD kiosks at seemingly every 7-11 and Walgreen's Store across Chicago.
As reported by Michael Liedtke in today's Chicago Tribune, in light of this increased competition, and mounting losses, Blockbuster Inc is shedding retail stores - more than 20% of its total will close by the end of 2010. That's 960 or so stores closing - out of 4,356 stores now open across the U.S.!
So far in 2009, 276 poorly-performing Blockbuster locations have closed. According to Securities and Exchange Commission Documents, 18% of Blockbuster stores are losing money.
Instead, the Blockbuster chain will emphasize small kiosks - they hope to have more than 10,000 of them up and running next year. They will deliver movies via the Internet, and through the mail.
But they have a lot of catching up to do versus Netflix!
The Netflix business model doesn't require a retail store presence at all. Customers can rent multiple movies per month, for a monthly subscription fee of between $9 and $17. Movies can be rented out of a Redbox Kiosk for $1 a piece per night! That's a compelling offer during an economic downturn . . . yes?
Like evolution, the old business model dies, to be replaced by more adaptive ones!
And, in time, the DVDs themselves will fall out of fashion, likely to be replaced by wide-spread, high-quality, on-demand, streaming HD video! (That's already here, folks, in Chicago, and in most other Metro Areas!)
But I'll always have fond memories for those "Good Old Days," running like a crazy man to return a nearly-overdue video to avoid the late charge. Do YOU remember?
Happy Viewing!
DEAN MOSS & DEAN'S TEAM CHICAGO
