The Brick and Mortar Video Rental Industry

Topics: Renting, Rental shop, Vending machine Pages: 7 (2404 words) Published: July 4, 2011
The video rental industry is an ever evolving industry that changes with the economy, evolution of culture, and technology. Due to the changes in general environment surrounding the video rental industry, it can be said that this once lucrative brick and mortar industry has gone through a death and rebirth. New concepts of distribution such as Netflix, Redbox, and cable rentals have hastened the extinction of the weekend drive to the video rental store. Various forces influence the video rental industry as it transitions from a bricks and mortar industry into a more technologically advanced industry. To remain viable the video rental giants must be willing to evolve. Extensive organizational changes are essential in the progression of the video rental industry. By identifying and exploring the changes that need to occur, the changes that have occurred, and by assessing the implications and effectiveness of these changes one can determine the viability off and direction that this lucrative industry must take. For the brick and mortar rental business to stay viable many changes need to occur. Organizational change may be varied in its definition and the amount of change that must occur. The text, Implementing Organizational Change Theory into Practice by Bert Spector states that one example of change might be “introducing a new business model to meet innovative competitors” (2010, pg. 1). For the former rental industry brick and mortar giants to remain competitive they must make changes and become more cost effective, convenient, technologically advanced, accepting of changes regarding the human implications, and managerially forward thinking. If these changes do not occur the likelihood that the former brick and mortar giants such as Blockbuster, Movie Gallery, and Hollywood Video will be able to compete with the new concepts of distribution such as Netflix, Redbox, and cable rentals is very minimal. Cost effectiveness and convenience are two of the largest forces driving the need for change. The days of four dollar video rentals for three nights is coming to an end. With the need for the average consumer to think in a more cost effective manor the idea of a one dollar per night movie rental at a kiosk in the local grocery store appeals to the consumers need for savings. “In 2003, there were 25,042 establishments that focused primarily on DVD, video game and VHS rentals, and industry revenues were $11.9 billion. In 2010, revenues dropped to 17,369 stores with revenues of $7.8 billion. And five years from now, numbers are expected to drop even further. The two primary issues are convenience and price” (Daily Herald, 2010). As we see the decline in video rental stores there is an equally obvious incline to the rise in convenience rentals and economical rentals. Technological advancement is another driving force behind the need for change in the brick and mortar video rental companies. As consumers find themselves now completely acclimated to a computer and internet age, the sociocultural as well as technological forces become more apparent in the video rental industry. ”Americans are watching movies via video subscription services such as Netflix, vending machine services such as Redbox and services that offer movies on demand via cable, satellite and the Internet”(Lieberman, 2010). Through dot com companies like Netflix, the consumer has the option of paying a monthly fee and downloading and watching videos through their children’s gaming systems such as Xbox 360 or Wii system. They also have the option of ordering rentals through their cable or satellite provider. Our culture has become more technologically savvy, but also is very much more convenience driven. Our culture has become enamored with the quick rental fix. These Driving forces behind the changes in the video rental industry have created the reason and the need for change. However, there are human implications such as why consumers want change and the...
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