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Last week, another bit of evidence appeared that supports the position that DVDs (and Blu-ray discs) should be put on the endangered list. Movie Gallery filed for Chapter 11 bankruptcy protection as it tries to find a way to deal with its growing debt. The company has more than 2,600 stores in the U.S. in the Movie Gallery, Hollywood Video, and Crazy Games retail chains. The company’s restructuring plan calls for closing 760 of those stores, or a bit more than a quarter of the total. The closures come on top of “closing several hundred underperforming stores across the country” according to the company press release, and that they “closing additional stores during the Chapter 11 process.” This is the company’s second trip into bankruptcy, with the last one starting in 2007 and ending in 2008. According to an article in TWICE, the company had $1.4 billion in revenues for 2009, which sounds impressive until you stack it up against the $2 billion it collected in 2008. Certainly it’s difficult to run a brick-and-mortar operation that competes with the NetFlix and RedBox juggernauts, but I also view this as the contraction of a market in general that is coping with alternate delivery systems for movies and other video content. The NetFlix streaming movie service and Hulu’s television episode delivery are sparking rapid growth of video delivery over the Internet. We still have a long way to go before the balance shifts from plastic discs to broadband connections, but the change is accelerating and this only makes the future for storefront operations such as Movie Gallery and Blockbuster that much more uncertain.
Posted by Alfred Poor, February 8, 2010 5:00 AM
Reader Commentary I don't know... Hollywood was having problems before the download phenomena really began. If they were, I suspect all the stores in the chain were, too. The local Hollywood stores in my neighborhood (one near me, and one in a neighboring town) are both shuttered, and have been for a while. Even Blockbuster is having a tough time here. Meanwhile, Netflix and Redbox are chugging right along. At least a large portion of the change is in just that. Most of the people I know are Netflix customers, but very few of them know, or care, about downloading. ...and that includes almost all of my fellow (young) employees at Peet's Coffee.... I am not so sure we are looking at an inevitable end of optical media just yet. I agree that rentals on optical media will lose a lot of ground to downloads and streaming, but I don't necesarily see downloads displacing blu-ray or even DVDs yet as an ownership vehicle. While I am willing to pay $2 on ITunes to catch up on the last episode of Lost (if it's not on Hulu) or $5 on a PPV streaming video, I am not quite ready to "buy" a $20 download if what I want is my own copy of Quantum of Solace. The number of Blu-Ray players being sold still seem to indicate that for years to come consumers will be looking to take advantage of that format and the unsurpassed quality it presents for a long time. Streaming is still compressed and cannot yet rival Blu-ray. But even when they do, I sense that there aren't significant numbers of folks out there who are willing to shell out upwards of $15 for a movie without getting something physical that they can admire. Admit it, we all like the feeling of... It seems to me it was a year or 2 ago that I predicted the death of removable media.... That feeling of ownwershp is hard to rival with... I get that, but it has its limits. How many of you reading this bought movies on VHS tapes? When was the last time you watched one? Did any of you buy LaserDisc movies? How's that working out for you? 10 to 15 years from now, when we're streaming 2K or even 4K stereoscopic video to our living rooms, I don't think your Blu-ray discs will get any more use than that great geology text you saved from college because you figured you'd get around to really studying it someday. I understand the joys of ownership, but I don't think that this alone can sustain an outmoded media format. Alfred... They really pushed hard for us to to buy every piece of crap movie they ever released it seems. There might be 10 or less movies or series I would even want to watch more than once. With HBO, Showtime, Starz, Encore, etc. pay per view and on demand who needs to take up the shelf space. I would like the option of buying, downloading or licensing. I have been tossing a lot of VHS because it is unlikely that I will ever watch them again in my lifetime. I am doing the same with CD's, DVD's and books. They've created a hoarding society...... Did any of you buy LaserDisc movies? How's that working out for you? Well, my LDs still look good. Obviously not up to HD but many of them look as good (a few better) than some standard DVDs. And most of them have better audio. Not to mention the titles that have never been released on DVD, HD-DVD, or BD. So LD has been working out just fine for me for over 20 years. That's a longer run than standard DVD!... Film11, I'm glad to hear that your LD titles are holding up. My question isn't so much about how good they look, however, but how often do you watch them? I suspect that the vast majority of purchased movies -- whether it is VHS, Beta, LaserDisc, DVD, Blu-ray, or downloaded -- are watched only once. I would be surprised if more than a third were watched a second time, and for those that have been watched five times or more, I'd expect that we're well into the single digit percentages. And that's even factoring in a two-year-old's ability to watch the same Barney video over and over and over and over again. (I'm only considering private purchases by consumers; copies bought to be rented don't count.) Say the average price is $15, this makes the average purchased movie pretty expensive, especially when compared with the rental price. Alfred... That is where I agree. With the LDs, I occasionally pull one out and fire it up for fun. I buy very few movies on BD (This year, I only bought three) because I just don't see how often I can watch the same movie repeatedly. The 3 I purchased, I know I'll watch again. But for most films, once usually is enough. With a tough economy, I suspect many others are starting to follow suit. Streaming is perfect for most people, who could care elss about PQ or AQ. Think of how many people own HDTVs and don't even realize they are not getting HD! Or have the sets set to Stretch-O-Vision.... I would be surprised if more than a third were watched a second time, and for those that have been watched five times or more, I'd expect that we're well into the single digit percentages. I'm probably in the minority, but the majority of my purchased DVDs were accumulated specifically because I will - and do - watch them more than once. It has to do with how little I find on TV (Dish network everything package). Even the channels with movies have little to offer most of the time - unless, of course, it's one of the movies I have in my DVD collection. Then it comes to whether or not the movie is on a channel a)without commercials; b)proper screen format; and c)something I haven't already seen recently. And, yes, I have a Netflix account as well, for those movies I fully expect to watch only once. Even there, if I'm pushed enough to want to watch a movie a second time, I'll just put it back in my queue and move it up the rank. ... Great column and fascinating debate. Thank you for bringing up this interesting topic. I don't think it's all decided. There are many indicators pointing towards the death of optical, but some others seem not too. Let me elaborate: How many of you reading this bought movies on VHS tapes? When was the last time you watched one? Did any of you buy LaserDisc movies? How's that working out for you? I agree. The problem is that we seldom ask ourselves how often we will really watch a movie before we buy it. It's irrational, but it will happen. The question to ask is what will make me buy a download instead of a shiny disc. Short argument: Why am I not convinced the optical disc is on its last leg? Well, let's look at other things that should have been obsolete and that have more reason to be obsolete. Movie theaters, CDs, Books. Yet, they are still around and not on the endangered species list. ... More from Alfred Poor
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About Alfred PoorAlfred Poor is a well-known display industry expert, who writes the daily HDTV Almanac. He wrote for PC Magazine for more than 20 years, and now is focusing on the home entertainment and home networking markets. |
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