Sam Nguyen wakes up everyday at around 8 AM to drive to work at his movie rental shop, “Video Town,” located in the city Hawthorne, to open up at exactly 10 AM. Throughout the rest of the day, he is met with a majority of long-time customers–who have been going for years–that are either returning a movie or asking him for help on what the best new release is to rent.
“Is this movie good, Sam?” one 5-year-old boy asks, holding up a DVD.
“It’s horrible,” replies Sam, with a little laugh.
Sam has been fortunate enough to be able to open his shop for more than 15 years, welcoming all those that want to rent movies from his establishment.
Sam, of course, is the exception.
With the sudden business transaction between Time Warner Cable and Comcast that was followed by Netflix paying Comcast for better streaming access, it is safe to assume that a majority of viewership is shifting towards the lovely world of the internet.
And while most of this discussion revolves around the relationship between television shows and broadcasting channels, the discussion should start to include movies and the financial stake when it comes to certain businesses for that particular industry.
The movie industry has always been fortunate to leave an economic “car accident” scene virtually without a scratch. Almost all of the Motion Picture Association of America (MPAA)’s theatrical market annual reports show consistent progress, proving that no matter what the cost, consumers will still line up at midnight to see the latest blockbuster film.
However, once those movies have left the theatres and begin their way to the land of renting and purchasing movies from specific local businesses, not as many people are racing to get there at midnight.
What caused this very gradual shift?
Back in the 1970’s and 1980’s, US citizens would rush to stores in order to access their favorite movies without having to depend on television broadcast schedules telling them when they were going to watch it. In the 90’s, as Blockbuster rose up, making $785 million in profits on $2.4 billion in revenues: a profit margin of over 30 percent. However, what is important about Blockbuster’s success was all the profit they made from overdue and late fees from customers who would forget to turn it their rentals as scheduled and the fact that people had no other method of viewing movies, aside from actually buying the movie.
But things have changed.
These “brick and mortar” shops are facing large competition from technological alternatives. Instead of going to a local rental store such as the once-upon-a-time giant Blockbuster, one can now quickly go to the grocery store and pay for their bread and then quickly rent out a movie from a Redbox machine all before leaving the store.
Or if that is too much of a burden on people, the existence of Netflix and Amazon provide even more convenience by allowing consumers to access whichever movie they want from the comfort of their home. Netflix started their business model by showing commercials that focused on the fact that DVDs could be mailed to one’s house and one could mail it right back in the same envelope–and with no late fees.
Amazon also provides the same alternative to consumers, allowing them to both rent and buy movies from their website. Blockbuster attempted to compete with these emerging enterprises by creating its own website, but by 2007, it was tanking and going on the verge of bankruptcy (which it declared in 2010).
Even to those that are still seeking a physical space to purchase their product, the opposite is expected. Much like the way that Redbox is offered at grocery stores or outside convenience stores, the interior of the Redbox itself provides lots of options. One has the choice of DVDs, Blu-Ray discs and even video games when searching through the “Box”.
This abundance of product is why locations like Target or Best Buy are able to have such success. Joanna Cantu, manager at a Best Buy in Lawndale, CA, believes that Best Buy is the best of both worlds.
“Here, one can go into the DVD or Blu-Ray section and see something they like, want to buy it, and then decide they also need a laptop to watch it,” she said.
Although Best Buy gets a majority of its profit from its laptops, tablets and large high definition televisions, Cantu says the store still recognizes that watching movies will never go out of style.
“Movies are extended shows in a sense–they are a form of escape and the way that people like going to bookstores because they still get excited purchasing a book or even just being inside of a bookstore, I believe people have the same feeling when they buy a movie they really wanted,” she said.
Still, there is no denying that movie rental shops are now talked about once in a blue moon. There are overwhelming different forms of getting a movie once it has stopped being shown in the movie theatres.
What is even more threatening is the emergence of taking out this fine line between movie theatres, movies at home, and access of the internet. Slowly, it is becoming all intertwined into one big thing.
Televisions are now being turned into Smart TVs, where you can access your cable channels and switch onto Netflix with the click of a button.
But if that is not enough for consumers, particularly to the younger demographic, Microsoft’s newly released Xbox One now has an update coming up later in March that will allow players to watch video, play games and chat with friends all on one screen. Video includes movies which players can purchase and save in their Xbox One hard drive to watch whenever they want.
There has not been any speculation about Comcast going into the video game console industry, but considering the way that this lure into the internet spectrum is flowing, one can only assume that Comcast is patiently waiting for the appropriate opportunity to do this.
And yet, as companies and technology are racing to the top of the cultural universe, it is the simple and once rental shops that are being left at the bottom without a ladder.
However, for successful people like Sam Nguyen who have managed to stay alive, the advice provided by them to those that believe all hope is lost is the simple realization that never goes away: the gift of family.
“What people are looking for is an experience with entertainment. And in order to appreciate an experience, it has to be shared with someone,” he said. “If you are able to provide that aspect of family to people, and you can do it from a shop that is not even suppose to exist anymore, you have done a good job.”