How can we save mom and pop Video Stores?
Sunday, March 15, 2009
I was very sad to discover that Insomniac video in San Luis Obispo shut down recently, replaced by various Blockbusters throughout town. The "Leather Tongue" on Valencia street in San Francisco recently shut down under similar circumstances. Also on Valencia, Lost Weekend Video faces a similar fate if business does not improve. My friend works at Lost Weekend and we were recently debating American Apparel's right to do business on the street. I pointed out that AA created a sought-after image, and has the right to sell its product wherever people are vain enough to buy it. There is no mom-and-pop boutique that sells their stuff. On the other hand, I told her I would oppose the introduction of a blockbuster, which is hollow as a brand and leverages the wall-mart-like capabilites of scale to dominate the market.
I've never been impressed with blockbuster. Movies are a merely a commodity, service an inconvenience.The bright lights and crowded aisles annoy me. I purposely start at "Z" instead of "A" in the new releases section, just to avoid being caught in the left-to-right cattle procession of prospective viewers. I can never remember what it was I wanted to watch in the first place and I find that I judge a movie by it's DVD jacket far too often. The blue and yellow glow is the only option in most cities, unfortunately. To make things worse, they added a fulfillment-by-mail service to compete with netflix and greencine.
If competing with blockbuster isn't enough, tack on on a flailing economy and also the botched introduction of yet another new medium: Blu-ray. There are some tough decisions for the small operation to make, such as how to strategically purchase new inventory and what to do with older titles that do not perform, including decaying VHS. How does one maintain enough new releases to keep a mainstream clientele, while also stocking the niche and cult films that are sought out by the more avante garde following of film buffs - the staunchest supporters of an independent supplier.
This has me thinking, how can I help save the mom and pop video store? Obviously I am inclined to think that the business model itself needs help, but I also think there are software solutions that can reinvigorate the consumer experience, and make it a lot more convenient. Netflix has made my movie browsing experience incredibly rich and relevant. It keeps track of a list of movies I've watched or rated and a cue of movies that I am waiting for. They offer over a hundred thousand titles - yet the on-dmand selstion is weak and I still enjoy the instant gratification of a video store on the way home from dinner. What if there were a way these services could compliment eachother? The mom and pop shares a common enemy with netflix, and that is blockbuster.
I depend heavily on the recomendation engine in Netflix and have rated over 600 films that I have watched. There are over 300 films in my cue. Most video stores keep a record of rental history. What if I could import/export my Netflix watched/rated/cued to my local video store account? What if they could export/import my rental history to netflix? Most video stores have a computer for customers to use. If I could walk into the video store and login to a terminal, with my netflix cue and a few dozen recomendations, I would have a much quicker and organized selection experience. The video store could devote more space to cofortable browsing terminals and get rid of the aisles of empty boxes, requiring much less square footage for the operation. The sleeves used to ship netflix videos are far more efficient for storage than even the smallest jewel box. Local stores should also adopt return envelopes to make it more convenient to return DVD's.
On the topic of software, I think there is a lot that can be done. Software is becoming one of the biggest disadvantages for the small business. There are several small companies providing database and POS packages for video stores. http://www.theultimatevideo.com/, http://www.rapidrental.com/, http://www.vmtsoft.com/, etc. I'm not sure what blockbuster is using these days, but up until a few years ago it was still a DOS-based, non-network-connected package, this has always amazed me. You couldn't use a membership or return movies from one blockbuster at another. I think this has changed, not sure. If the small software companies providing these solutions want to survive, they should also consider a change in business model from selling products to selling a service.
There needs to be a new software solution for the small video store. This might consist of some kind of generic service similar to netflix in features. There would be a hosted and shared database of all movies that any participating store can tap into and offer a subset of. There would also be a databse of secure user records that can be shared from one video store to the next under the user's terms, and a third and more secure databse of transaction records for each physical establishment using the system. This would create the basis for a loose and wide federation of member-only independent video stores. Each store using this software would provide the users with a consistent user interface, such that if a customer moves to a new city, they can quickly find a new independent shop to rent from, with the exact same experience.
Here is where it starts to get interesting. If your software is running as a service and tapping into a shared databse, not only would members be able to transfer preference data from store to store, but stores could actually share inventory data in partnership and provide certain kinds of fulfillment services to eachother. If for example I rent a movie from my cue at the local store tonight, they should be able to automatically check for the availability of my next film and obtain it from across town if necessary so I can pick it up tomorrow night.
This is the point at which the idea becomes more complex, and netflix again begins to re-enter the equation. There has got to be some way that a company like netflix can cooperate with the local video store - combining forces to compete against blockbuster. There is no way in hell that netflix or greencine is going to get into the brick-and-mortar business, but if they could some-how act as a compliment to the local video store's offerings and keep them alive, then maybe we'd have something. I think that if netflix were to offer a hosted catalog, user accounts, billing and alternate fulfiment service to video store owners that they might be able to slow down blockbuster's growth and keep the mom and pop open a few years longer. The rental history data collected from users and stores could be mined to help local stores predict which titles to purchase. Out-of-stock items could be outsourced to netflix and shipped. Depending on who fulfils what, the store and netflix split the customer's monthly dues or per-movie fees, depending on how the user chooses to pay.
Ideally, I'd like to see this as an independent and open source service - which could tap into greencine or any other fulfilment outfit but I also think it is something netflix could do as a gesture to the small business owner and the film community in general - while becoming even more competitive at its core business. Perhaps flixster would be the ideal candiate for hosting user data.
My questions to the video store owner:
* What software do you use?
* What format is your movie database in? Can it be exported?
* What is the unique ID for each movie, is it something like an ISBN for books?
* How do you store customer data such as rental history?
* How many computers physically exist in your store?
* What is a typical monthly operating cost?
* How much waste is attributed to buying the wrong movies?
* Where do you buy from?
* How many movies can you physically fit per square foot on average?
* Do you think people would browse movies at terminals (like a jukebox)? Would this kill the "essence" of a video store?