If you've entered the Bellingham Fred Meyer from the North
entrance lately, you've probably noticed the dvd rental kiosk known as Moviecube.
I've rented 2 or 3 movies from it now and I must say that aside from a smaller
selection, I would much rather rent a movie a for $1 from a conveniently placed
kiosk like Moviecube than deal with Blockbuster or Hollywood Video paying $4 to
$5 for a 5 day rental I don't need. Granted, out of 200 movies or so, there are
only a handful I'm interested in seeing; as I would rather watch documentaries
and other content farther down the long tail. But, moviecube and other kiosk
competitors have the potential to take a majority share of the new release
market from the likes of Blockbuster and Hollywood Video as overhead and wage requirements
will prevent Blockbuster from competing with kiosks on a price level. All
this will amount to these traditional brick and mortar stores losing more
market share just like what happened when Netflixs came along.
Next time you walk into a Blockbuster or Hollywood video, you should ask
yourself if all that space is really necessary. Do we really need 30 aisles of
wasted space to stock a commodity product like a movie, a product that has very
little physical value?
In the long run, content wants to be free to roam. By that I mean
consumers want the choice to purchase, view, and dispose of media in a
proliferated manner. Eventually, Blockbuster’s brick and mortar business
will no longer be feasible as the convenience through at home streaming media
rentals will force Blockbuster to close unprofitable stores. In the long
run, they’re costs in operating brick-and-mortar stores will make them
uncompetitive. They need to transition most of their resources towards
electronic distribution, if they wish to survive with the likes of Netflix’s,
Moviecube, or even Apple through its iTunes movie rentals. Given, the
average consumer does not yet possess the technological ease to order and
dispose of content electronically and from their own home. In the same respect,
most communities fail to possess the broadband capacity required to stream or
download video in HD quality. It might take another 10 to 20 years until this
becomes the standard. However, don't expect Blockbuster’s stock to do well
anytime in the near future. Check out this article from Bloomberg back in 2007.
Zach is back! It's been a while since posting man, you'll be glad to know you're still on my BlogRoll and I check maybe once a month to see if you've updated.
Good to have you back, let me know when you're down this way and we'll get together.
Posted by: Doug | November 12, 2008 at 07:23 PM