ANOTHER CASUALTY

Yesterday evening as we headed out for our usual Thursday evening activities, She Who Must Be Obeyed noticed that the nearby Blockbuster video shoppe was dark and empty.

Ave atque vale, local Blockbuster. Requiescat in pace. We hardly knew ye. Barukh Dayan Emet.

The fate of the local outlet notwithstanding, Blockbuster itself is still functioning. The company filed for Chapter 11 bankruptcy protection back in September 2010, its finances having been crippled by competition from online content delivery services like Netflix and customer-friendly kiosk operations like Redbox. Their original plan was to keep over 3,000 of their 4,000 stores running, but the money just wasn’t there despite the company’s having liquidated their entire Canadian business.

Eight months ago, Dish Network bought Blockbuster at auction for the fire-sale price of $300 million. They’re hoping to keep 500-600 Blockbuster stores open, a fraction of their former glory. The one at Providence and Johnson Ferry Roads was not one of them.

Blockbuster is not out of the woods. Only time will tell if Dish Network can leverage their satellite-based programming with Blockbuster’s inventory of physical media storage assets, or whether they can reconfigure Blockbuster’s content delivery technology to compete in today’s marketplace.

They’ve evolved in the past, successfully making the transition from renting VHS videotape cassettes to DVD’s and Blu-Ray discs. But those were still physical delivery systems that used the old business model of people going to a store. And you had to go twice: to rent and then to return. That encouraged an ongoing rent-return-rent cycle, but it also meant that customers had to get up off of their butts and burn some gasoline.

Netflix helped kill that model. With videos as accessible as your mailbox (provided you were willing to wait a couple of days), you no longer had to go anywhere. And if you were out running errands, why, there was now a Redbox kiosk at the local supermarket - cheap and easy. Finally, with broadband-driven streaming, there was no longer any need for physical data storage media: you could just slurp your movies right from the Internet’s data-firehose.

The Blue Box is not the first brick-and-mortar entertainment retailer to run up against the hard realities of the digitally enabled consumer marketplace. It was just a few months ago that Borders bit the dust most unceremoniously. It won’t be the last, either. The Amazons of this world are hungry, and they will eat.

To evolve fast enough to compete with all that, Blockbuster and their new corporate masters will need to be imaginative and nimble. I’m not hopeful... but I still carry my Blockbuster card against the hope that they may yet succeed.