Tuesday, June 8, 2010

Brick and Mortar – Going the Way of the Dinosaur

Last week, I went over to my local video rental store. And, much to my surprise, it was closed. No warning. One day it was there. The next gone. No. It wasn’t some obscure local video store. In fact, it was the number one rental video chain in the country, Blockbuster. Perhaps, you’ve noticed by now brick and mortar video stores are going the way of the dinosaur. In other words, they are going EXTINCT.

In fact, Hollywood Video and Movie Gallery have also called it quits.  After several reorganizations and bankruptcies, they just couldn’t find a way to make a go of it. So what does all of this mean to you as a consumer? And, if you are a future filmmaker, do you have a future?

First of all, I don’t see home video disappearing any time in the foreseeable future. None of this will hurt the big studios like Paramount, Sony, Warner Brothers, Fox or Disney. They will find a way to continue to distribute their product. So don’t worry about finding your favorite Hollywood blockbusters.

As brick and mortar stores are closing, new platforms are emerging, such as Red Box, Netflix, Streaming, Downloads, and Pay-Per-View. So you definitely have choices. There are four key areas where you will feel the greatest impact. First, price. Movie rental stores basically priced themselves out of existence. Most major chains charged nearly $5 to rent a movie. Ouch! The results were predictable. Consumers rebelled and looked for cheaper alternatives. And they found them in the form of Red Box and Netflix.

Red Box kiosks can be found almost anywhere. They offer enormous value. You can rent a movie for one night for only $1. That’s a deal people are looking for. Netflix offers DVDs by mail. Pay one flat fee per month, and you can watch as many movies as you please.

So what about selection? Consumers are used to a wide and diverse selection of titles at traditional brick and mortar stores. That’s not found at Red Box because they are interested only in major Hollywood titles. Netflix does offer an extensive library of both DVDs and Blurays. Pay-Per-View, which can be found on most cable and satellite systems, can offer you only a limited selection of major movies. Basically, you are going to have to work a little harder to find more obscure movies and independent features in the future.

One thing we are all looking for is convenience. All of the new platforms certainly make it easy to rent your favorite titles. Push a few buttons on your remote, and you can see major releases on your cable and satellite systems. On your trip to the grocery store and you can easily spot a Red Box kiosk. Netflix offers your movies through the mail with self-addressed envelopes. It doesn’t get any easier than that. Traditionally video rental stores were anything but convenient. I’m sure you know what I’m talking about. Long lines and, most often, you could never find the movie you were looking for.

When they get around to writing the history of movie rental stores, the one thing that I’m convinced that led to their demise is late fees. I can’t think of one time when I was at a video store where a customer did not have a complaint about late fees. Late fees made many people stop renting movies at brick and mortar stores. When most late fees were totaled up, it would have been cheaper just to buy the movie. It was totally ridiculous. Traditional video stores dug their own grave.  The good news is late fees have been eliminated from most of the new platforms. You know what the price is going in. And there are no surprises.

What if you are a filmmaker or work in the business?  Or perhaps, you are a film student and are concerned about your future employment opportunities. As you know, the movie industry is always a fluid business. No one can predict the future. But I have an uneasy feeling about the demise of traditional brick and mortar stores. And you should be concerned. Video stores needed to fill shelf space. Most major studios combined could offer only a total of three new titles per week. But on average most video chains like Blockbuster or Hollywood Video offered anywhere from 14 to 16 new titles. Most of these movies came from mid-level studios, direct-to-video and independent distributors.

The new platforms, such as Red Box, are concerned only with major Hollywood films. It’s quite possible that independent studios could be squeezed out of the market. And that means less opportunities in the future. To put it bluntly, distribution could dry up, eventually resulting in less movies being produced. That’s not good for you as a filmmaker or for consumers.

One of the great benefits of brick and mortar stores was that they offered a form of democracy for low-budget filmmakers. There was your film, an obscure title, right next to major $100 million Hollywood films. It gave you an opportunity to find a mainstream audience. The newer platforms will make that much more difficult. It will be more challenging for consumers to discover and find your film. Sure, downloads and streaming may provide some alternatives for mid-level studios and independents. But there is something about picking up a DVD cover and examining the plot and artwork. It’s not the same experience online. You might find a niche audience, but can you break out into the mainstream.

In some ways, I’m sorry to see brick and mortar stores closing. I think we are losing something in the process. Only time will tell if we have less choices in the future.

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