Villing & Company

Death of a Video Salesman, Birth of a New One

As the agency video guy, it seems appropriate that I comment on the impending doom of the video rental chains whose often boarded-up establishments pockmark our suburban landscapes. This is a major paradigm shift in the history of home video, and though much has already been said about it, I’d like to put in my two cents as well.

You don’t have to drive far to find at least one gutted Blockbuster with the familiar faded outline of their logo as the only hard evidence of the previous inhabitants. Hollywood Video and other big chains are in the same boat. Much like the drug store soda fountains of the twenties and drive-ins of the fifties, video stores are moving rapidly into the realm of nostalgia. Sure a few are still hanging on for dear life, but what’s that crescendo of rumble I hear in the distance? That, my friends, is a death rattle.

I had a feeling something was up a couple of years ago when Blockbuster started pushing movie-related junk and Hollywood started downsizing their stores to smaller retail spaces with less inventory. Then, more recently here in the Midwest, we’ve seen the real trickle-down effect as store after store closes its doors, probably forever. With the digital distribution model booming, customer incentive to rent the old-fashioned way is headed toward near extinction.

We make emotional connections to things we grow accustomed to and video stores are no different. So it’s natural that when something that has been part of so many memories in our lives begins to die, we point fingers and wonder what went wrong. I’ve read a lot of comments from people across the Web who blame the collapse on the way the video chains handled their business, pointing out Blockbuster’s “No Late Fees!” fiasco and other corporate pratfalls implying poor management caused their downfall. But the truth is, most of the mistakes the video chains made were inevitable symptoms of a much deeper problem.

The digital revolution came barreling into town like a freight train, a remarkably well-oiled and efficient train at that, and because of its superiority in convenience many people were happy to hop aboard. The mistake of the video chains was much simpler. You can hear freight trains coming. They’re loud. Blockbuster didn’t even put its ear to the tracks.

The chains created a model that was enormously profitable for its time. But there in the shadows lurked Netflix. As the world changed around the big chains, they clung to their model until it was a horse and buggy in a world of 747s. Then, after the digital distribution 747s had already worked out most of their kinks, Blockbuster decided to strap a jet engine to the back of their horse and buggy and tell everyone it was the same thing.

The big chains are to be blamed for their lack of foresight. They were too busy counting their money to notice the enormous profit potential of the Web and other digital distribution means. They were too little too late. Currently, Blockbuster is closing hundreds of stores and making a massive push to introduce DVD vending machines. Oh wait, maybe they’ve never heard of RedBox.

My point is that sometimes no amount of marketing will help turn things around if the thing you’re marketing is becoming totally irrelevant. It reminds me of Thom Villing’s example of the ice box industry after the introduction of refrigerators. The key is to make sure your product is evolving with the tides of the ever-changing ocean of technology around us.

Netflix and Redbox and all the other snazzy new kids aren’t immune to this. Just like MySpace crumbling in the wake of Facebook, Netflix and RedBox can suffer too if they’re not careful. What works in 2010 may not fly in 2020. It’s all about awareness and early action.

Filed Under: general

Villing & Company

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