| Editorial June 2005
A New Blockbuster Video and What it Means
I saw the "Coming Soon" sign on my way home the
other day -- a new Blockbuster Video is opening within a few miles of my house. I’m
stoked. I won’t have to travel out of my way to return or pick up movies, and because
I live in what is still a largely underdeveloped area of Coastal North Carolina, the
crowds won’t be too terribly bad for a few years still. I’ve relied on rentals
for my movie watching since the advent of DVD. I have a small collection of movies on
disc, perhaps 50 titles, but rent, on average, one or two movies a week. Seeing the sign
for a new video store close by is a definite event.
But is the future of bricks-and-mortar video rental stores
in jeopardy? Perhaps. Netflix seems to be doing well enough to force Blockbuster to
rethink its business strategy. Retailers, no matter the product, must have an online
presence in today’s marketplace, and Blockbuster is no exception. And the late-fee
structure that has peeved so many renters for so long was due for a change to meet growing
customer expectations. Blockbuster Video and its less healthy cousin, Hollywood Video,
must look at how their business models need to adapt to a changing landscape in the next
five to ten years. After all, they’re as much speculators as any other investors.
The questions are pertinent and timely: Will we be
downloading all of our movies from the Internet in the foreseeable future? Will a new
format -- Blu-ray or HD DVD -- take hold to anchor the rental business for the next
ten years? The certain answer is that no one really knows what will happen, but it’s
likely that something will happen to shake things up.
The music industry has always been compared with the movie
business -- both have relied on optical discs for storage and hardware for home and car
playback -- but in this case there is no clear parallel. Downloadable music is the
here and now, and has without question become a boon for companies such as Apple. With MP3
taking hold and CD sales stagnant, was there any real reason to embrace a new optical disc
format for music? No, and the failures of SACD and DVD-Audio are due, at least in part, to
this.
The movie industry does not currently face quite the same
scenario. Full-length high-definition movies -- consumers’ desire for which is
driving the development of HD DVD and Blu-ray -- are not yet readily available for
download online, and it will be years before that becomes a viable consumer option. Unlike
its CD counterpart, the DVD industry is booming. The continued DVD upswing can only
bolster support for a high-definition version of same.
The one fly in the ointment for hi-def video discs would be
a format war. In fact, such a war could be disastrous -- as the competition for shelf
space grows more fierce, rental stores increasingly need a single inventory. VHS is now
barely represented at all in the stores near me. Will there be a last-minute deal between
the Blu-ray and HD DVD camps to prevent the public and the movie studios from having
to choose between two formats? There’s a rumor floating around that there will be.
I’m rooting for it. If that happens, we could see a semi-smooth transition into the
reign of the next optical disc. If that happens, owning a Blockbuster Video franchise
could be an enviable position to be in.
...Jeff Fritz
editor@hometheatersound.com |
