MovieCube = More Competition For Box Stores

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.

Comments

[Doug]

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.