Are Blockbuster's Days Numbered?

By Acheron February 25, 2001 5:35 PM

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(Nando) With the rise in broadband technology, the need for movie rental shops is dwindling.  Will places like Blockbuster fade away, or will they find a place in the new market?  Do we even have the capacity to handle video on demand transactions?  Many seem to think so.

The problem with the current system is that you go to a video store, say Blockbuster, and try to check out that movie that you and everyone else have been dying to see.  Guess what?  All copies gone.  Checked out.  Three weeks / one month later, you finally get your copy of that movie.  After so much wear and tear, the video has become faded and has a dingy audio track.  And what about that classic that no one seems to carry?

Well, the "Powers That Be" have been trying to tackle these issues.  With the introduction of high speed DSL and cable modems in many U.S. cities, the ability to provide the movie lover with "any movie, any time" is becoming a reality.

Things aren't perfect yet, however.  Many who have these high speed connections know all too well of jumpy audio and video.  But as high speed access becomes more mature and widely used, this idea could really take off, and that's what major film studios are betting on.

Last week, Universal Studios signed on with broadband network Intertainer to deliver new releases and archived films from eight major movie studios on a digital cable platform beginning this month.

The deal comes on the heels of similar plans by Miramax Films with SightSound Technologies, Sony Pictures with MovieFly, as well as Disney and Blockbuster Inc.

Sony's plans will allow viewers to download movies from its Web sites for a fee, and let them copy the film onto a compact disc which they could pass on to others, who would also be required to pay for the film.

Blockbuster, the biggest name in video rentals in the United States, aims to avoid obsolescence by delivering movies to customers over high-speed phone lines with its partner, Texas energy company Enron.

Disney has said it is also looking into the use of wireless set-top boxes that could be used to pull films from the Internet.

I don't know about anyone else, but I don't see this taking off nearly as quickly, as they would like you to believe.  Too many people rely on video stores for their source of movies, and this would seemlingly come as a greater hurdle for the technically inept to overcome than programming the VCR was.

It's really interesting though.  I can see it happening, just not within the next few years.  Even when it does come about, it will be slow to take over the market, and will be an option for the movie viewing public, rather than the way.

I guess Blockbuster's days are numbered, at least in its current form.

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RE: Are Blockbuster's Days Numbered?   reply

Posted by A random shemp (No Email) on February 26, 2001 10:00 AM

Yes, "many" cities have DSL and cable modems, but the fact is, that the majority of North Americans do not have access to broadband technology, let alone reliable stable access. Until all telephone and cable systems are upgraded to handle the continuously increasing demand for high speed access, the demise of Blockbuster is far away.

Movie companies are salivating over digital delivery of movies for one important reason: the people who will subscribe to such a service have a lot of disposable income. Companies will be clawing over each other to be exclusive advertisers and the movie studios will make a killing selling advertising time before a movie.

What will disappear are the VHS tapes at Blockbuster. I suspect that by the end of the year 2001, at least 70 percent of the retail floor area of a Blockbuster will be dedicated to DVDs