Walking into the lone Blockbuster in Eugene on Willamette St. feels like walking into a museum. In the center of the store is a wide open space that feels like a gallery. To the left is game rentals for Playstation, Xbox and Wii. To the right is the movie section with everything from Action, Drama and Comedy to Independent and International. It’s almost as if it’s an exhibit showcasing a time in the entertainment industry when we drove to a store and walked aimlessly down aisles looking for something to rent on a Friday night.
But that time has come and gone. The days of looking at plastic cases advertising a particular movie title are over. As many Science Fiction movies have warned us over the years, the machines have taken over. Replacing physical stores and human employees are rental kiosks in fast-food restaurants and grocery stores, as well as streaming options in our homes. Thousands of titles literally at our fingertips have become the new way of accessing home entertainment.
Despite this shift in the way we access and rent content, Blockbuster hasn’t fully thrown in the towel just yet. A couple of weeks ago, the video chain announced the release of the Better Blockbuster Extravaganza — which includes free rentals of movies and games at their updated stores.
Through July 31, Blockbuster is offering exclusive deals as part of the release. Like me you’ve probably gotten emails from Blockbuster advertising coupons that are available at betterblockbuster.com. Some of the deals they’re offering include: Rent one movie get one free, rent one game get one free and new subscription plans that appeal to kids and adults.
“The Extravaganza is a great opportunity for people to visit the new and better Blockbuster — we have refreshed our stores, creating a new shopping experience,” said Blockbuster president Michael Kelly.
Kelly continued his PR pitch by saying that the video chain has created an easier way to find what customers are looking for and that Blockbuster has nearly 900 store locations (Still) which makes them the largest video rental chain nationwide.
Kelly has to say words like “easier,” “refreshed” and “largest” because he’s the president of the company. But really all he’s saying is that Blockbuster is the last survivor of the old way to rent movies. To say Blockbuster is the largest video rental chain in the country is like saying you have the largest VCR store in the nation.
He went on to say that Blockbuster has more stores than Apple, Microsoft and Costco combined. He has to compare his company to others to provide context, but when you think about it, Microsoft is the number one “software” company according to softwaretop100.org so they aren’t really worried about “hardware” or more specifically, physical things to sell.
Apple has more money than the Government and they sell their products in big box stores like Best Buy and Target so the need for more exclusive Apple stores isn’t necessary. Costco stores are 142,000 sq. ft. on average so they can’t exactly put one up wherever they want.
So the examples Kelly is comparing his company to don’t exactly hold up when you look closely, but looking at the big picture, will this “Blockbuster Revision” produce a more competitive balance between the archaic rental store and the new-age kiosks, on demand and streaming services?
According to The NPD Group, which is the leading provider of consumer and retail information, DVDs and Blu-ray discs rented from kiosks as well as streaming subscription services like Netflix accounted for 73 percent of all video rentals in the third quarter of 2010 while in-store rentals provided the remaining 27 percent. Keep in mind that these numbers were reported in January of 2011 following the announcement that Blockbuster had filed for bankruptcy. The company has since been bought by DISH Network Corporation.
Redbox currently has more than 36,000 kiosks around the United States renting new-release movies for as little as $1.20 a day. The nearly 900 Blockbuster stores nationwide charge new movies $2.99 to rent for the first day. Last time I checked, 36,000 is a lot more than 900 and $1.20 is less than $2.99.
Besides having to worry about kiosks, an even more convenient alternative to driving to a location is instant streaming. With so many options including Netflix, Hulu Plus and Vudu, consumers have access to a vast library of older and newer titles. And there are many devices that can support these services including the Playstation 3, XBOX 360, Nintendo Wii, a number of Blu-ray machines and newer televisions that have streaming built in.
But there is one area in which Blockbuster has a shot at surviving; their competitors continuing to increase prices.
Redbox charges $1.20 a day to rent a movie, but a year ago that price was $1 so it’s only a matter of time before the price goes up again as Redbox deals with the cost of buying discs and licensing agreements with movies studios. Netflix of course went through a public relations nightmare in 2011 when they decided to split their online streaming and DVD-by-mail plans into two and thus creating a 60 percent price bump for people (including me) who wanted both plans. As a result, the company lost millions of subscribers and its stock fell another 25 percent on Wednesday, following a drop of 19.4 percent for the second-quarter earnings this year.
Blockbuster of course realized there was a shift in the movie rental market and they started a streaming service of their own. But with Netflix, Hulu Plus, Vudu, Amazon Video on Demand, iTunes and a new streaming service coming later this year from a joint venture between Redbox and Comcast, Blockbuster might get lost in the shuffle — as well as a symbol for the way we used to rent movies.
So Michael Kelly may say that his Blockbuster stores have been “refreshed,” but as I walk down aisles of DVD racks at my lone Blockbuster in town, I see a store that looks hollow and gaunt; anything but refreshed. The only difference between the way it looks now and when I visited it a month ago is the presence of DISH Network. I drove all the way across town for this? I could be sitting at home mulling over these same options from the comfort of my recliner.