Rogers Video Selling Previously Viewed Blu-ray Movies

Speaking of the video rental business, I noticed this weekend that Canadian video rental retailer Rogers Video is already heavily promoting sales of previously viewed Blu-ray movie titles.

At an average price of about $15 and change each, that's a pretty frugal option if you've already got a Blu-ray player and actually feel the need to own movies.

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Breaking News: Blockbuster Loses Less Money

Given the general economic climate, not to mention the collision course with obsolescence that video rental stores are on, this is cause for much rejoicing at Blockbuster HQ.

TWICE: Blockbuster Reports Lower Q3 Net Loss

Blockbuster reported lower sales and a reduced net loss for its third quarter, ended Oct. 5.
Total revenues for the third quarter decreased 2.7 percent, or $33.6 million, to $1.20 billion, as compared with $1.24 billion in the third quarter of last year.
Net loss for the quarter narrowed 48.3 percent to $17.8 million, as compared with a net loss of $34.4 million the third quarter of last year.

Sometimes you just have to be happy with what you've got.

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Bearish on Blockbuster

Cnet's Don Resinger doesn't hold back in his vivisection of Blockbuster Video's chances in the online marketplace in his morning rant:

Cnet: Say goodbye to Blockbuster

Much like the print media and retail stores refusing to change, Blockbuster has been a victim on an online company finding new and inventive ways of bringing a product to a customer. And due to its size and outdated corporate culture, there really is no salvation for Blockbuster at this point. Try as it might, the future of Blockbuster is bleak, at best.
Sure, the company still enjoys revenue that climb into the billions of dollars, but with an ever-increasing net loss and a public refusal to focus on Total Access--the area where Netflix continues to dominate--what is the impetus for us to jump on the Blockbuster bandwagon?
Simply put, Blockbuster is doomed. And while many of us have known it for a while now, it's amazing to me that the chairman of the company admitted this in a not-so subtle way, as well.

Mr. Resinger does such a great hatchet job on the company, I don't know what else to add, except to encourage you to read the whole thing.

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Rogers Video offers Rewards Program

In a last ditch effort to stem the decline of video rentals, Rogers Video is unrolling a loyalty program.

Marketnews: Rogers Video Starts Rewards Program

In an effort to reward customer loyalty, Rogers Video is introducing a Star Rewards program that will afford customers points for future rentals and purchases. Customers will collect points with each purchase that can later be used toward movie and game rentals; or items purchased from the store. "Customer service is paramount to our business, so we wanted to find a new way to reward our loyal customers," said Marshall Wilmot, Vice President, Marketing, Rogers Retail. "We are pleased to be able to offer Star Rewards and lead the way in an enhanced retail experience by offering customers big savings."
One Star Rewards point is collected for every movie or game rental, and two points for every movie or game purchase. A free movie or game rental costs 10 points; while 20 points will supply a free previously-viewed movie, or $10 off a new movie or game purchase. The fee to join the program is $10, and customers receive five bonus points upon sign-up.
Bonus points can also be awarded with things like receiving a free kids movie rental with a regular rental. Members can also receive special offers and promotions via e-mail, and will automatically be entered into Rogers Video promotions and contests.

Personally, I'd like to see Rogers Video reward me by not renting me DVDs that are all scratched up. No joke, 6 of the last 10 that I've rented have glitched out even before the halfway point. The staff are good about crediting my account for them, or getting me another copy at no charge, but just once I would like to see a movie all the way through the first time!

On another note, I've commented previously that the video rental stores in my area have been looking decidedly shabby in the last year or so. Their Visual Presentation standards have all slid terribly, due in part I think to the fact that they're struggling with staffing issues, as in the current Oil Boom labor market people who normally would work in a video store can make $18 an hour doing manual labor, or answering the phone at a geotechnical survey company. This leaves retailers needing to fill low-skill retail jobs with the borderline unemployable. I haven't encountered any poor service per se at Rogers or Blockbuster, just long lines at the checkout because of minimal staffing, and the poor souls behind the counter seem overwhelmed and flustered by the stress and demands of their job description.

It does seem that between a declining rental business and serious labor shortages, this is a One-Two punch that's putting the video rental business on the mat.

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First domino in the video rental business falls

TWICE: Movie Gallery In Default; Mulling Sale

Dothan, Ala. – Movie Gallery, the nation’s No. 2 video rental chain, has defaulted on its senior credit facility, citing second quarter results that were “significantly softer than expected.”
The company, comprised of the Movie Gallery, Hollywood Video and Game Crazy chains, said it may seek a waiver from its lenders to remedy the defaults, and will try to conserve cash by accelerating store closings and consolidations. Other options it is considering include divesting assets, recapitalizing, forming a strategic alliance, or merging with or selling to a third party.

The article in TWICE goes on (and on!) to list the litany of woes that affect not only Movie Gallery, but also Blockbuster, and the category as a whole.

I've noticed that the Rogers Video and both Blockbuster locations in my neighborhood have been looking more and more shabby over the past year. I can't help but believe that the sun is definetely setting on the video rental store business. When the bandwidth capacity for high-definition pay downloads hits us, expect the deterioration of the retail category to accelerate.

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Blockbuster Video gives the nod to Blu-ray

Sony wins this round, for what it's worth:

BBC: Blockbuster to focus on Blu-ray

The move is viewed as a blow for the rival Toshiba-backed HD DVD format - which has been battling against the Blu-ray format, supported by Sony.
Blockbuster said that consumers have chosen Blu-ray over HD DVD in the 250 stores where both were available.
The limited choice of titles in the HD DVD format was also a factor in focusing on Blu-ray, Blockbuster said.
"The consumers are sending us a message. I can't ignore what I'm seeing," Matthew Smith, senior vice president of merchandising at Blockbusters, told the Associated Press news agency.
Mr Smith added that most studios were offering films on Blu-ray, with the exception of Universal which has been supplying films on HD DVD alone.

Of course, it's not lost on me that bricks and mortar video rental stores are well past their zenith, with Netflix and other, online options slowly gaining ascendancy. With those pay-for-download options to come, there is a definete shelf-life to the marketability of High Definition hardcopy content. This creates a pleasing symmetry: an outdated retail model giving support to a hardcopy format that is itself virtually obsolescent.

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