MediaPost- TVBoard  http://www.mediapost.com/publications/index.cfm?fa=Articles.showArticle&art_aid=95981

by Mike Bloxham

Something like 10 years ago, I remember sitting in a pub in London with a couple of friends discussing the promise of the then newly burgeoning Internet and postulating on what it might really mean for all those bricks and mortar businesses that were casually being written off by the dotcom wunderkinds as dinosaurs well on the path to extinction. Being genetically jaded and hard-wired to be skeptical of many of the fashionably all-encompassing statements of the day (and never having been described as fashionable), my friends and I sat in the corner of the pub nurturing our pints of ale pontificating on what scenarios might ultimately play out and become real.

 

It is in the nature of all such discussions that a healthy degree of what is said turns out in retrospect to be utter rubbish — however wise and insightful it may sound at the time. One thing we agreed upon, though — and which has stood the test of time — is that being a business like Tower Records or Blockbuster Video was really going to suck if this Internet thing lived up to its promise and enabled us all to get as much digitized content over the Web as we were prepared to pay for.

After all, the incumbents were laden down with legacy systems, expensive real estate or leases, an employee base structured for personal interactions at point of purchase, nationwide distribution and logistics and all the rest. What chance would such businesses stand against aggressive and well-organized newcomers? In such a brave new world, they wouldn’t even be playing on a level field. Perhaps the one (not insignificant) thing they might have going for them — assuming they kept it relevant — would be their brand and the relationship consumers already had with it.

Fast-forward to the present day, and what do we see? Certainly the record business has gone through turbulent times as the retail model has been redefined with, of all things, a consumer electronics/IT brand bringing order to the growing chaos and downward spiral of economic doom. Music downloads are now hard-wired into the DNA of vast numbers of the population, and CDs are increasingly the preserve of the older demographic (many of whom also download their music). When was the last time you visited a music store?

As for video, the field is much more open — and for that matter, more interesting.

As the world of video-on-demand has taken its various shapes — from Cable VOD through DVRs and DVDs to online video (to say nothing of the arrival on the scene of Netflix) — the competitive landscape for the likes of Blockbuster has become infinitely more complicated. The cozy old days of retail video rental when it was all about location, price and having sufficient of the right range of stock available must seem a long-distant memory for those looking to maintain the value of this business.

Please go here  to read the full article. [Note: User registeration will be required on the site.]

Advertisements