Looking back over the numerous technological advances of the past twenty years—the essential component being the globe-spanning info-network that is the Internet as we know it—it truly is a marvelous time to be alive. Yet, even as my inner futurist eagerly awaits the coming singularity like a kid at Christmas, this forward march into the instant accessibility and digitized collective consciousness of the event horizon makes me prematurely nostalgic for all that we are sure to leave behind. All those tangible, tactile, experiential, and delightfully archaic trappings of the physical world. Things like vinyl records, cassette tapes, and CDs. Books, magazines, and newspapers. VHS tapes and DVDs. And, yes—brick and mortar retail chains like Blockbuster Video.
According to a recent report on the Los Angeles Times’ entertainment news blog, struggling video rental/retail giant Blockbuster Inc. is making plans to file for Chapter 11 bankruptcy this September in hopes of assuaging its various creditors, to whom the Dallas, TX-based company is indebted $920 million. Beleaguered by interest payments—plus growing competition from Internet-savvy subscription services like Netflix and GameFly, self-service video rental kiosks from Redbox, and, to a lesser extent, video-on-demand through various satellite and digital cable providers (not to mention web-based venues like Hulu)—Blockbuster has struggled to grow its business in recent years, effectively losing $1.1 billion in revenue since 2008. This after being the name in video (and videogame) rentals for more than a decade, with over 3,400 stores operating in the United States alone.
Lo, how the mighty have fallen.
Mind you, I’m not bemoaning the impending demise of Blockbuster as a business. Considering that I last patronized the company in the fall of 2009 (my first time in years) when an erstwhile location on East Fort Avenue in Baltimore was pulling up shop and liquidating its wares, it’s safe to say that I, as a consumer, would not be adversely affected if other local Blockbusters followed suit.
Rather, I am saddened by what the fall of Blockbuster symbolizes, as its financial troubles seem to herald the beginning of the end for the dedicated physical media megachains and shopping mall cornerstones of the 1980’s and 1990’s. Alongside f.y.e. owner Trans World Entertainment’s diminishing sales figures—according to the most recent annual report submitted to the SEC, TWE and its subsidiaries experienced an 18% decline in physical album sales in Fiscal 2009 on top of a 20% decrease in Fiscal 2008, a seemingly constant withering as Apple’s iTunes, Dimensional Associates’ eMusic, and seller-of-all-things Amazon.com gobble up larger and larger portions of the proverbial pie—it would appear as though the large-scale audio and video retailers of my childhood and teenaged years are slowly but surely falling before their digital competitors.
But this is nothing that you haven’t heard before. From a Smithian-Darwinian standpoint, this is exactly as it should be: the invisible hand, natural selection, survival of the fittest and all that. The free market has spoken, and those who fail to evolve and adapt themselves to suit its whims will most assuredly pay the price, literally and figuratively. Hell, odds are that you may even be inclined to cheer Blockbuster’s downfall… though you might want to hold off on such celebratory Schadenfreude for the time being.
For one thing, the disparity between Blockbuster and its upstart competitors is not entirely insurmountable. True, for only $8.99 a month, Netflix provides unlimited (albeit one-at-a-time) DVD movie rentals via mail, online title browsing and automated queue-creation, and instantaneous video streaming via a computer, smartphone, or web-enabled current-generation console gaming system. There are no late fees, no time-consuming trips to and from a physical store, and no issues with so-so selection, limited availability, or misfiled movies. There is only convenience, convenience, and more convenience. It’s a pretty solid scheme, really.
But, however belatedly, Blockbuster is learning from the new guys. With its “Blockbuster by Mail” program, the erstwhile leader in movie rentals has begun offering multiple subscription packages (ranging in monthly price from $8.99 to $19.99), all of which provide access to both movies and videogames, thereby competing with Netflix and GameFly in one fell (and relatively cost-effective) swoop. Then there is “Blockbuster On Demand”, which enables digital streaming to computers, smartphones, and select Blu-ray players and DVRs. As a bonus to more traditional renters, Blockbuster also offers retail-specific deals, such as free or discounted rentals in exchange for returning mail-ordered videos and games to a physical store. To top it off, Blockbuster has begun supplementing its existing stores with Redbox-esque stand-alone kiosks, strategically positioned in high-traffic areas like pharmacies, corner stores, and supermarkets. Who says that you can’t teach an old dog new tricks?
And yet, for all its updating, the ol’ buster of blocks is incontrovertibly tethered to the dead weight of leasing, maintaining, staffing, and stocking physical storefronts—heavy expenses which completely skew the profit margins of NetFlix and GameFly’s streamlined mail-order and on-demand business models (and Redbox’s easy-peasy self-service). While Blockbuster Inc.’s forthcoming bankruptcy filing and subsequent restructuring should attrition away many of those lingering expenses, only time will tell if the overly-indebted company can survive the transition to a less physical/more digital video and game rental service that combines the best traits—digital convenience, physical presence—of its current competitors.
Though I’d be willing to wager that Blockbuster has some fight left in it yet, the potential demise of the once-great rental chain boils down to the growing obsolescence of in-real-life media retailers and their attendant physical wares. An obsolescence which, as a child of the optical disc-centric retail boom of the eighties, nineties, and early naughties, I find somewhat hard to accept. Love or loathe them as emblems of milquetoast suburbia and killers of mom-and-pop shops, erstwhile-omnipresent stores like Blockbuster and f.y.e. have provided countless youths with their first video and record store-browsing experiences, wandering the stacks, finger-flipping through movies and albums, discovering hidden or forgotten treasures along the way. Admittedly, the institutional settings, bright fluorescent lights, Billboard- and Box Office-friendly wares, and uniformed sales clerks of major chains create a sterile and somewhat impersonal environment when compared with the crusty uniqueness of independently-owned and -operated video and record shops (e.g., Video Americain and Sound Garden). But they do provide an experience, and a regularly accessible one at that. Inane or no, suburban or no, companies like Blockbuster provide something tangible, something in the world and of the world—something that pointing, clicking, scrolling, and tapping on a computer or smartphone simply cannot replicate.
And, returning to those of you inclined to wish death and destruction upon all major retail chains, there is also this quandary: if retail megachains killed the independent mom-and-pop shops, and big e-business is killing the megachains, what, if anything, will fill the physical vacuum left by the megachains’ demise? Really, what is the likelihood of a renaissance of localized, independent video and record shops when the very mega-businesses that overwhelmed them are themselves becoming obsolete? Moreover: what is the greater cost to consumers? What price will we—the listeners, viewers, and readers—pay for our constant craving for digital immediacy and mail-order convenience?
Only the future knows for sure… I’m just not so sure that it will be as rosy, or as real, as I once hoped it would be.
Features (September 1st, 2010)
Tags: beatbots, features, hip to the groove, blockbuster, bankruptcy