Blockbuster takes one step back
It’s Act 3 for the proud conqueror and hero of the story. Blockbuster, champion of home movie watching and basic model for American business, has faced off against a host of successors and appears to win.
On the right flank, Netflix introduces movie rental by mail and was first to offer movies rented over the computer instantly. Blockbuster counters with intriguing unlimited rental-length programs and the ability to bring back a ‘mailer’ DVD to their stores for an exchange.
Redbox, a service that has gotten a foothold in Southeastern Wisconsin, is a kind of self-service vending machine containing certain popular movies. It eliminates the need for business hours and fancy packaging. There wasn’t much Blockbuster could do there, but they honorably start to offer new film distributors such as Film Movement that offered more foreign and arthouse titles. Blockbuster endures against the ‘red’ menace.
Blockbuster seemed to remain King of the Hill, but a disastrous fourth-quarter loss of $435 million for the Texas-based giant meant the fun was over. They went back to the drawing board. Quietly last week, only noticed by members who looked at their receipts, was the return of dreaded late fees.
We need to back up for a moment and look how we got here as a country, and how Blockbuster forgot it was its own worst enemy.
As recent as 2007, Blockbuster suddenly had a ton of titles available via the online service (which I proudly use) and a wealth more for rent on store shelves. The extras can quickly and cheaply be re-sold as “pre-viewed” copies when needed. The downside of this — which may not be Blockbuster’s fault directly but they’ve propagated it — is that many DVD titles offered in the last year by the chain don’t come with “Special Features.”
Part of the problem is with Blu-Ray. While the new technology struggles to become the common format for discs in a world where the object that holds the entertainment has become irrelevant to the data itself, Blu-Ray movies are the ones holding all the goodies.
I grew up on press kits in my former life as a video editor for Gino Salomone’s junket interviews, where the behind-the-scenes magic and commentary was available before the movie came out. So when they stopped hiding the extras as “easter eggs” on post-theatrical run DVDs and started offering them as menu standards, I was overjoyed. I have no use for still galleries and “making-of” featurettes, but man do I love outtakes, deleted scenes and audio commentaries.
Recently, I started to realize that pre-viewed movies sold 2 for $20 at Blockbuster had no inherent value. Why would I buy a non-widescreen, no feature copy of Watchmen after I’d seen it three times already? The thrill of lending the title out to friends soon wanes, and my shelf space is better fitted for books and knick-knacks.
Part of the low-culture of movie making at present is the sheer volume of productions out there. Look back in time and see that 10 short years ago, one new movie opened every week, or at least every other week. That one movie would then take up to a year to come out in stores. Now even a blockbuster film goes from premiere to rental shelf in six months, crowded on all sides by four other films that came out that same weekend and a handful of straight-to-DVD titles. Top that off with a couple of older films that are being printed to DVD for the first time.
Here’s an example: the unexpected comedy hit The Hangover premieres on June 5, 2009. It’s such a big hit that the planned DVD release has to be bumped to give it more time. It finally arrives on DVD an eon later in home entertainment terms — on Dec. 7, 2009. This version has no special features but floods the market. A week later, the special 2-disc “Unrated” edition is out and the Blu-Ray version has even more features. Two weeks later, it’s on the resale table and goes on-demand everywhere else.
To Blockbuster, the time to make a profit is over. Selling the copy is just a way to pay for more inventory and real estate.
Blockbuster found itself at a crossroads for how to satisfy the customer. They wanted to have enough copies in stock so that store managers never run out. Online customers could easily be screwed over and not told that their copies came from regional warehouses and priority went to the stores. As customers figured out inventive ways to manipulate Blockbuster, the rental chain countered. Sure, you can trade in that ‘mailer’ you’re not happy with, but your queue doesn’t clear up until you return the store copy taken out. Even though most of the movies come from Illinois by mail, inform customers that, because of the snowstorm on the eastern seaboard, your copy has been delayed. Space out the usage, since they have no late fees in this program.
This is why late fees have returned to the store. Blockbuster lost the goodwill, and now the counterpunches come out. That is to say, late fees have returned to the Blockbuster stores that haven’t been closed as the company prepares to shutter 500 locations in the coming months. Although the final battle for common relevance is still going on, the most prominent movie rental chain raises rates on daily and weekly rentals, then re-institutes a policy that landed them in court once already. Wow, what a difference.