VIDEO STORES CLOSING: THE WAY OF THE FUTURE

FROM THE CANADIAN PRESS

The video store used to be a buzzing hub of activity, a place guaranteed to be packed on weekends with movie buffs standing elbow to elbow casually poring over vast selections of films to take home.

ADAM GRANT wistfully recalled the glory days at his local shop, where strangers became fast friends over their mutual admiration for a film or a director’s work.

But he fears those days are pretty much over.

There’s less excitement now during his still regular trips to the video shop and he frets that his local haunt in Toronto, a BLOCKBUSTER outlet, is on borrowed time given recent news that the chain’s Canadian operations were forced into receivership, putting its 400 odd stores in limbo.

“What I really liked about it was the social element. You go in there on a Friday or Saturday night — even a Monday or Tuesday if you’re bored — and you could spend an hour or two in there easily, engaging and educating yourself.”

BLOCKBUSTER may not disappear entirely — U.S. creditors are looking for suitors to purchase the Canadian business — but there’s no question the industry’s best years are behind it.

Plenty of smaller stores are hurting too. VIDEOMATICA, a Vancouver indie institution, recently announced it’ll be closing shop in the months ahead after 28 years in business.

ADAM GRANT, a fan of physical media and collector of VHS tapes, DVDs and Blurays, fears the digital world isn’t really ready to fill the void should video stores vanish and he’s worried it’ll get even harder to find rare films.

The limitless nature of the internet suggests cinephiles should one day be able to view any movie, any time, much like streaming music services now serve as an enormous virtual jukebox with millions of tracks instantly available. No more having to canvas video stores across town for a hard to find title, or being forced to buy a copy because no one has it to rent.

But we’re nowhere near that reality yet, especially in Canada.

While NETFLIX has made major inroads since launching here last September, with 800,000 subscribers now paying $7.99 a month for unlimited access to thousands of movies and TV shows, critics complain that the streaming site doesn’t have many new releases and its library is still limited.

Meanwhile, a number of channels exist for renting new releases and older titles online, such as Apple’s iTunes, Cineplex and Rogers On Demand Online. Most of the latest movies are available, particularly hit Hollywood fare, but to say there are gaps in the online back catalogues is a huge understatement.

“I think it’s a really scary trend that things will go completely digital at some point. A lot of movies could disappear because I don’t think the digital service providers will find much point in streaming them,” ADAM GRANT commented.

The fear is not completely unfounded, given that digital video represents just a tiny slice of rental revenue today.

Even in the U.S., which has far better access to digital content in terms of the numbers of titles available, the digital share of the business was only about three per cent last year.

Zip.ca, the Canadian company that currently rents videos by mail, is readying its jump into the digital market through a partnership with SAMSUNG to offer rentals through internet connected TVs, Bluray players and other home theatre products.

CEO SCOTT RICHARDS also hinted in an interview that the company has a plan to offer an all access NETFLIX type plan in the future, although he conceded “it’s not in 2011.”

He hopes online rentals will complement Zip’s current business and help solve a problem that’s frustrated customers: long waiting lists to access new releases. If Zip customers really want to see the latest movie they’ll be able to — if they’re willing to pay the rental fee.

“When a hot new movie launches, we’ve never been able to satisfy demand by mailing DVDs, we’ve just never been able to keep up with it, the hotter the movie the more people we’ve disappointed,” SCOTT RICHARDS stated.

But the sleeper piece of Zip’s strategy is not digital, SCOTT RICHARDS added, although it is rooted in a new technology: kiosks.

Zip has a fleet of vending machines currently in production that will expand on a pilot project that put kiosks in grocery stores in Ottawa. Kiosks are already a huge business in the U.S., with market leader Redbox having deployed 27,000 machines across the country, offering rentals at $1 a day.

SCOTT RICHARDS expects Zip’s pricing will be set at $2 a day for new releases and plans to roll out the new kiosks in the Greater Toronto Area first.

While he believes in digital, he expects it’ll take time for mainstream consumers to migrate on line and hopes Zip’s kiosks will scoop up business where video stores disappear.

“If it turns out that a lot of brick and mortar stores start to close there’s going to be a huge vacuum that the kiosks are going to play a major role in, as we transition over time to digital.”

“The majority of Canadians are still taking a DVD and sticking it in a player, that’s the most typical thing that still happens, so we’re not guessing as to when a tipping point comes (exactly). The factors of what happens to Blockbuster here – the factors of what happens with studio deals in years to come – those will all play factors in how fast we as Canadians adopt digital.”

ROGERS said it has a theory as to when digital will take over — which it won’t publicly divulge — but the transition has clearly begun, says chief marketing officer JOHN BOYNTON.

“The dramatic growth in video on demand on the cable side, the transfer of some people who want to watch it on line and our explosive growth in the Rogers on Demand Online product is a good indication that customers are looking for way more flexibility than some of the old traditional models.”

But the demand to rent physical discs hasn’t gone away — and probably won’t soon — so Rogers is continuing to fine tune its stores rather than just shut them all down. In recent years, stores have become customer service hubs for ROGERS’ different businesses and now carry cable boxes, mobile phones, computer products and video game consoles and games.

And, of course, movies.

“The customer doesn’t suddenly stop (wanting to rent videos) tomorrow…That doesn’t happen,” JOHN BOYNTON said.

“These trends happen over time and more and more, more of our effort and emphasis in terms of what happens in that store will start to move more and more to some of the vehicles you’re already starting to see take off.”

That’s good news for ADAM GRANT, who doesn’t look forward to the day that all video discovery is done on a screen.

“There’s something to be said for the tangible item in your hand and being able to look at the cover, look at who’s in it and what it’s about. And I think it loses intimacy when you have to have it just in digital format.”

“At the video store you could find a movie to change your life or change your viewpoint on so many different things.”

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