Don’t count indies out
By Tom Paine -- Video Business, 7/21/2006
JULY 21 | Shortly before I graduated from college, my favorite professor left us all with these words: “The only thing that will remain constant in our future is that life will continue to change at an accelerating pace, and we must do what’s needed to stay current.” Sound like our industry?
Paine
Much has been written or said lately portraying indie rentailers as a relic of the past. You would not have known it from this month’s VSDA show. There was constant conversation about how energized people seemed. Of course, some individual relics were there, but most dealers I talked with were savvy and forward-looking. They realize that most of the retail segment in the industry has turned to sell-through and the Internet has changed the marketplace and will continue to do so.
Nonetheless, video rental stores are hardly relics. DVD sales and rentals in the U.S. in 2005 were $24.3 billion, and 32% of that money was spent on rentals. Blockbuster has 7,000 stores worldwide, Movie Gallery has 4,800 in North America, and there are an estimated 2,000 to 3,000 independent rentailers in the U.S. All these stores rent movies to customers who prefer renting and watching movies in the privacy of their homes.
This is not news for studio execs. They know they are getting a huge portion of the $8.9 billion in rental and previously-viewed disc sales in the U.S. Sure, rentailers do not carry the weight we once did, but we still serve markets and pocketbooks that cannot be served any other way. Everyone must know that.
So, despite all the chatter about friction in the industry—which, by the way, has existed since day one—the movie rental industry is still a big market and, despite the hype of alternate delivery, isn’t going away any time soon.
Indies are resilient, and our tenacity built this industry along with studios. That resiliency created rental outlets on every street corner, it fought in the Supreme Court for the right to rent, it fights in other courts for a level playing field and, like any other business, shops for the best prices, buying even from competitors.
Rentailers know their customers and bring in product that serves them. We know we are in a service industry and providing a quality experience keeps customers coming back. We know that the rental model is the one that works in convenience outlets and selling new product will always be ancillary in these outlets.
Finally, rentailers are thankful for the movie industry and the studios who market their movies to the public. As the studios look for new sources of revenue, video stores will continue to serve customers who prefer renting instead of buying, watching movies on a TV instead of a laptop and browsing our shelves instead of the Internet.
Tom Paine is owner of six-store DVDNow! in Redmond, Wash.
