Blockbuster going into administration gives me an excuse to recall the first video library I joined.
It was over twenty-five years ago in a London suburb. I'm pretty sure it cost £40 to join, it was £2 for each video you rented and you had to buy a £40 video to activate your membership.
I paid it. With a fairly light heart in fact. After all it was a small price to pay for the miracle of being able to watch something other than the four TV channels.
The first one we signed up with was Video Junction in Billericay, £50 cheque as deposit behind the counter and £1 per night for rental. Being given the full colour case, rather than the Video Junction anono-box was a rare treat. Independent video shops - usually with film poster splattered counters - spread faster than the Norovirus.
ReplyDeleteBut it wasn't just indie vid shops. I remember hiring films from garages, convenience stores and once a small DIY/timber shop. In fact a mate of mine used to do the rounds as a video man, hawking his titles around the Benfleet and Canvey area.
Did you ever rent a CD from a video shop. I did from Videodrome 50p per night...Around the same CD players were on offer at Radio Rentals
The story below is really worth reading, it's from 1999 just before Blockbuster floated after a turnaround. They wanted about $17 a share, it peaked at $19, valuing the company in the billions.
ReplyDeleteWhat's interesting is the author hints at the coming tsunami, as anyone with a brain watching the music industry collapsing at the time would have done. But "analysts" say that Blockbusters' wounds "were self-inflicted and had little to do with competing technology."
Everyone -- investors, management, analysts -- so often stick with a model living in denial until it literally collapses, in this case 14 years after this story was run. This quote hints at the reason -- Hollywood is next:
"More important, industry analysts say, the studios have no incentive to tamper with the current 30-to-90-day window that makes new films available in video stores before they can be shown through other nontheatrical channels like pay-per-view, basic cable or network television."
Here's the story:
http://www.nytimes.com/1999/08/08/business/at-the-gate-comeback-kid-on-video-the-blockbuster-offering.html
Maybe it's not that they stick with the model. Maybe it's they can't, no matter how hard they try, adapt their model and change. Blockbuster knew what to do. This was so early the phrase "sell movies at a website" was used:
ReplyDeleteFort Worth Star-Telegram - October 22, 1999 - 2 BUSINESS
Blockbuster to start online video sales:Some analysts say Internet technology could drive some video stores out of business.
Blockbuster is preparing itself for the day when customers rent videos over the Internet instead of driving to a store. The Dallas-based company, the world's largest home-video chain, plans to sell movies and other merchandise at a Web site beginning next month, Chairman John Antioco said in an interview yesterday. Next spring, customers will be able to reserve movies over the Internet, but they'll still have to pick them up at the store -
I think Phil hits on it - it's often impossible for businesses to restructure until a major crisis.
ReplyDeleteThink IBM and Apple, where the significant restructurings that built their future only occurred because the shareholders had pretty much given up.
But Blockbuster could have been Lovefilm or Netflix - they had the studio relationships in place.
Then again, there would still have been the big story about them closing down the retail stores to go online - but maybe it would just have been a slow decline??
Similar story really - HMV had a chance to be Amazon, but if they had - they would be Amazon. They'd still be making retail staff redundant (while warehousing jobs in out of town sites are on the up. Asos now employ more people in Grimethorpe than the pit ever did).