To rent, or not to rent: that is just one of the questions.
In
the previous two posts about the possible imminent demise of Blockbuster
(scroll down to see ‘em), I compared my experiences of working at Blockbuster
to that of working at an independent video store, stated my case as why I
believe Blockbuster – and other corporate rental chains – are to film what
McDonald’s is to cuisine, and I interviewed an independent DVD rental store
owner in my neighbourhood about what it’s like trying to carve out a living in
an environment where the big guys wiped out almost all of the little guys. (And
let be very clear that there’s absolutely nothing wrong with working at
Blockbuster, in fact I know some really cool folks employed there – I’m simply
talking about the place as a business.) Below is part two of that interview with
J.R. Grassby, owner of Big Daddy’s DVD Shop, but before that – after
considering some of the things that J.R. told me – I’m going to weigh in what I
think the future might hold for the movie rental market.
It
seems like it’s going to continue to shrink, as mail services, downloads,
streaming, etc, continue to flourish, but I also think it’ll level out. In
particularly population-dense areas, the larger chains may still have stores
but it’ll be about smaller floor space to minimize real estate rental costs.
For example, the current owners of the indie store that I worked at cut their
floor space in half and went to a system that uses partial bins, in which filed
DVD covers can be flipped through (the great thing about the move from VHS to
DVD was the less space required for the smaller discs).
I
also believe that independent stores will start popping up again after the
bigger guys pull out because they can’t make enough profit for their
shareholders anymore. And those independent stores will do OK as long as they offer
what the chain stores don’t, which is a more personal touch. This means that
the local rental house becomes a place you want to stop by and browse and chat
up the film geek employees and get out about in your community. On a very basic
level, humans are visual and tactile, and I believe there’s a need to stand in
front of a shelf and pick up DVD cases, look at the cover and read the backs of
the cases.
Plus,
we’re social animals, so if the local video store seems welcoming, it becomes a
destination. I notice a lot of customer interaction when I go to Big Daddy’s (I’ve
included some pictures of what it looks like inside) – it’s a place to run into
your neighbours where you actually have something to chat about: movies.
Lastly, much like one feels lost when handed a menu the size of a phone book at
a restaurant, having any movie at your disposal to download is sometimes a
drawback – it’s just too much choice. I like standing in front of that new
release wall and being forced to choose from what’s there, I find that I’m more
likely to pick something I might not otherwise consider, so there’s also that
thrill of discovery. And because there are genuine movie lovers lording over
this selection, you feel like you’re in safe hands and can get an honest
opinion for the times when you’re either feeling adventurous or totally
clueless when it comes to what you feel like watching.
But
let’s see what else J.R has to say about it…
Even though films are
readily accessible through mail services, online streaming, downloads, etc.,
people still seem drawn to the experience of going to the video store. Why?
I think a large population in a small geographical area will
always just pop in and pick up a movie. If you are out and getting some
groceries and going to pick up some baked goods or chocolate or taking your dog
or child for a walk, it is easy to come in a shop like mine, take five minutes
and pick up a couple of movies for the week. Coming in to Big Daddy’s is easy,
everything is laid out properly; if you want a new release with Branjelina,
it’s right there, if you want the latest Criterion film it’s right there too –
no surfing no waiting, and you receive a quality product for a small fee. I
think if you live in a suburb, or out in the country, renting a movie becomes
more of an effort, and that's why I think the mail-out and to some extent the
downloaders do very well outside of city limits. Is it affecting my bottom
line? Absolutely! We have lost the fourteen to twenty four-year-olds, most of
them have never purchased music let alone rent movies. Am I losing customers to
downloading illegally or legally? Absolutely.
Why do you think
Blockbuster is in such trouble? Are people simply renting less than they used
to, or is there something about the business model that has failed?
I think the reason Blockbuster is losing money is because
it, like lot of large public companies, is accountable to shareholders, and the
shareholders are seeing a loss to the bottomline and investing in other
commodities. A guy with $10,000 invested in Blockbuster could care less if the
company purchased the latest, restored version of the first five seasons of the
Little Rascals, he wants annual
growth, regardless. Once Blockbuster introduced the now completely failed
"no late fee" policy, the company erased more than 30% or its annual
revenue. Now, as result it’s in tremendous trouble, and because of that policy,
thousands of small video shops, like mine, in North America have shut their
doors for good, because they could not compete with a company that essentially
gets free products and rents them out for as long as the customer wants at no
added cost. I think Blockbuster some how will completely destroy the rental
market before it goes bankrupt, I don't know how, but instead of losing to the
likes of Jumbo Video, Rogers or the smaller companies, they will ruin it for
everybody.
Will there continue
to be big chain rental stores in the future?
There is more than one game in town these days; there are so
many movie channels, video games, the internet, sports channels, etc.
Blockbuster didn't see the writing on the wall ten years ago, even though it
was the one writing it. I think the days of the giant video stores are done, if
you want to compete, you have to have a product that people want, and people
don't just want thousands of new releases anymore (I know Blockbuster has more
than just new releases, but they make up about two percent of the inventory –
big deal).
How about some advice
for someone thinking about opening a small rental store that needs to survive
amongst the big guys?
I think that as much as your product has to be desirable, so
to does your service. I can tell you that when I first opened, I had a fifth of
the inventory I have today, but people, for the most part, were patient and
loyal to Big Daddy's because they liked the service provided. Even today I
can't afford every movie I would like – it’s still a real grind
some months – but people like the personalities behind the
counter and the service, and they come back. Be loyal to your community. As a
shop owner just setting up, spend your money in that community and you will get
so much support. Also, don’t be afraid of opening up right next door to
Blockbuster. People are going there to rent a movie; you don't have to create a
new path for them to travel, they will come in and support you. Most people
like the little guy and would rather support faces they can see than
stockholders.