Why the local video store is on its last life
The video store at the end of Adam Turner's street is the creature that just won't die. But the PS3 and then Apple TV are the way to go if you want to be future-proofed.
Predicting the demise of video rental stores has long been sport for crystal ball gazers. Pay TV and then Video on Demand were supposed to kill off the video store, but it still lurks on my street corner like the undead on a Saturday night.
The introduction of DVDs revived video stores, as did the rise of gaming consoles. Blu-ray is going to bring them back from the brink again, but I'd say this is the last time. Blu-ray is likely to be the last physical video format and when it goes to the grave it will drag the video store with it. Suburbanites aren't ready for this yet, it's five to ten years away, but once the iPod generation inherits the earth they'll be happy to see the end of the optical disc.
Australia's squabbling over Fibre to the Node certainly gave the video store a stay of execution. By the time we've got the bandwidth to support widespread DVD-quality Video on Demand, Blu-ray will have raised the bar again. By the time we've got the bandwidth to support widespread Blu-ray-quality Video on Demand, companies like Blockbuster will be forced to morph into VoD services or else fade into irrelevance.
The big video rental chains aren't completely oblivious to the threat, but they're hamstrung by the fact they're franchises. If the head office made movies available online, it would be competing directly against individual store owners. Instead of looking to the internet, the big chains are talking about letting you copy movies to a USB stick and take them home to watch on a "Home Media Centre" set-top box. I can't see this taking off, especially if the box is going to cost customers money up front and lock them in to one rental chain. It harks back to the early days of radio when networks sold radios locked into their network. Pretty soon people realised they were getting screwed.
The video rental chains are right about one thing though, it all comes down to the device in the lounge room. Punters are getting set top box fatigue so you've got to be smart if you want to get your hardware into the home. Think of the PlayStation 3 or the Xbox 360 as a Trojan horse left on your doorstep, so Microsoft and Sony can get a foothold in your lounge room. Both have Video on Demand ambitions. The deal between TiVo and Amazon is another taste of what's to come, but of course the one to watch is Apple.
When Jobs is finished conquering the mobile phone market he'll turn his golden touch to the lounge room. The useless Apple TV will morph into a full blown media centre/PVR/VoD box and become the iPod of the lounge room, sweeping away all before it. There's talk that Jobs might even announce such a device this year. Entrenched players such as TiVo will ensure Apple has a decent fight on its hands this time.
If Blockbuster and Co want to survive the next decade they need to get into bed with the likes of Apple. The problem is Apple doesn't need a bricks and mortar distribution system like Blockbuster when it can deal directly with the studios, and then the iTunes Store can reach right into your lounge room. Content is king but, as always, content deals will be one of the last pieces of the puzzle to fall into place. It will be interesting to see if the movie studios learn from the stupid mistakes of the music labels.
There are a lot of pieces to the Video on Demand puzzle but, once they all fall into place, the video store is dead and buried.
When do you think we'll finally lay the video store to rest?
Other Blog Entries written by Adam Turner:
Thoughts on this article? Add a comment below.
Comments: 3
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Pacman
May 16, 2008 11:23 AM
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As long as Australia has crappy broadband data caps, the Video shop will be safe and sound for a long. Sure, you can download films on the net, but the amount of data that burns is not cost efficient to renting a weekly movie for $1 - $3.
Besides, people like the ability to go up the road on a weekend with their siginificant other and browse. It's what us humans do best...we love to browse things, touch them, read their covers..
It's like shopping therapy for girls with a small investment at the end of it all to justify the time spent 'browsing'.
The bigger danger is mail order rentals - netflix, bigpond movies etc. That's a boom market and takes out the hassle of returning movies ontime. It's biggest drawback is people like the convienience of going on a friday night/weekend to get their films...obviously it's a spur of the moment decision that a movie mail order system can't justify.
Another big emerging threat are DVD vending machines. They are huge in parts of europe. They look like big ATM's that you see housed in those 'atm rooms' and encased by sliding glass doors these days. They operate 24/7 and can only be entered by swiping a credit card or membership card. They are the video shops of the future - autonomous, staffless, robotic, automated video stores. |
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M9ROC
May 16, 2008 12:04 PM
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Video stores suck. Selections are bad, DVDs are often scratched and the number of crap videos on the market hardly justifys me wasting my time trawling through the shelves. I like to download the films i want and keep them on my external hard drive so they are there waiting for when i wnat them. I can find old classics online that my video store just won't have.
I like the idea of what Apple may bring to the living room. |
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GOLB77
Jun 12, 2008 9:41 PM
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Video stores may suck, but they're still fun to stroll around. There's something about seeing all the DVD covers and picking them up for a read. I reckon they'll be around for a while yet - hopefully their prices won't keep going up though...
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