Has Downloading Killed The Video Star?
Dan Nancarrow, BrisbaneTimes June 23, 2012
The local video store: No matter how you cut it, the
long-term future for movie rental outlets looks grim.
It's a ritual as old as VHS.
On an uneventful night, you head down to the local video
store, rummage through the shelves for a movie to rent or beckon the clerk for
a worthy recommendation.
But, like a fading video tape, this concept looks like it
is being gradually lost to history.
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The small corner video stores in Queensland are closing, the specialty rental
vendors are long gone and the larger stores are needing to diversify to stay
afloat.
No matter how you cut it, the long-term future for rental
stores looks grim.
But Franchise Entertainment Group managing director Paul
Uniacke remained positive.
He has been active in putting in place strategies to keep
many Blockbuster and Video Ezy franchises in place as well as rolling out
hundreds of strategically placed rental kiosks throughout the country.
Mr Uniacke said he hoped Franchise Group's army of 120
Video Ezy- and Blockbuster-branded kiosks (carrying new release DVDs no more
than 100 days old) would swell to 3000 Australia-wide within the next few
years, complimenting a fleet of 300 stores (200 fewer than today).
But his main concern was to make sure the stores that
remain diversify to stay relevant, whether that be by selling DVDs,
collectables or fast food (Cold Rock ice creameries have been added inside at
least six stores throughout the country).
"You have 350 square metres and if you can bring
other offerings into that store that gives you a chance at longevity," Mr
Uniacke said.
"If [owners don't diversify] they will die. If you
just want to just maintain a bricks and mortar rental store and you think
that's where your future is, good luck."
According to Network Video managing director Keran Wicks,
wage increases and "exponential rent" had added to the bottom line
costs for video stores.
Mr Uniacke said financial pressures were forcing mum and
dad owners out of the business nationwide.
He said Franchise Group was in the process of
rationalisation, with franchisees buying out outside competitors as well as
smaller operators within the group itself.
In Queensland
the rate of stores closing is disproportionately worse; a phenomenon Mr Uniacke
blamed on our most recent natural disaster.
"I've had franchisees who have said to me 'before the
flood we were doing $17,000 to $20,000 a week – post the floods we're doing
$10,000. No one's spending, the people aren't coming out, the insurance
companies aren't paying where they should, my franchise agreement is up, my
lease is up, I just don't know if I can risk another three to five
years'," he said.
"In the time I've been in this industry, the stores
in Brisbane region for bricks and mortar home
rentals have been some of strongest in Australia. But we're seeing some
unprecedented action coming out of that area that is actually very sad.
According to Mr Uniacke, small stores that exclusively
offered rentals were no longer viable, which came as no surprise to Andrew
Leavold
Having seen the writing on the wall two years ago, Mr
Leavold closed his cult film rental outlet Trash Video in West
End.
Mr Leavold said he was just as saddened by the fading
prominence of the video rental ritual, which he said used to be a fun and
adventurous part of our culture.
"The actual hunt for something that would be
considered special has gone now that we have at least the illusion of unlimited
access to material," he said.
"We also have the situation where there is so much
choice now that it is a bit bamboozling for people and they start having to
curl up into a foetal position and prepare a comfort zone around them so they
only come in contact with the most familiar things – those films that they've
seen before or films their colleagues are talking about around the water cooler
or those films that are constantly being bombarded at us from the Murdoch
media," he said.
"Retail has changed so much but also the nature of
how we consume films and how we regard the consumption of films is something we
can just download, dump, watch and forget.
"Film really doesn't have much of a value other than
for those collectors out there who feel that they must own them."
With the experience of renting being reduced to a purely
consumerist endeavour, Mr Leavold had no problem pointing out the reason for
the greater paradigm shift away from renting.
"Downloading. It's as simple as that," he said.
"There is no reason for anyone to rent any more if
they can just steal. Now the onus is more on ownership rather than renting.
"Retailers like JB Hi-Fi can supply the budget end of
things and then the specialist end can be taken care of by stores such as
Amazon or smaller niche.
"So really there is no room for anyone to do a shop
front any more unless they want to take on bulk wholesalers like JB Hi-Fi, who
can do it bigger and cheaper than anyone else."
The industry perspective differs.
Mr Uniacke did not see piracy as a bigger threat than the
rise in rental costs or wage issues.
To him, illegal downloading was "just another
competitor", one that provided a product of inferior quality that had not
been any more severe in recent years.
"[Piracy] is no more of an issue today than it was
two years ago," he said.
"There has not been some change in peoples' habits
overnight where they've become better at stealing that IP, it's not like
'because the NBN is here we can steal it quicker', we're not seeing any of
that.
"That's not why we're rationalising, absolutely not."
Mr Uniacke said illegal downloads were not making any
greater impact either.
In April, YouTube launched its movie rental service in Australia
offering streaming films for as low as $3.99 through the website and Google
Play.
Mr Uniacke said it was too early to gauge how the service
had been received in Australia,
but going by trends in the United
States, the transition hasn't been dramatic.
Streaming accounts for less than 5 per cent of the rental
industry in the US.
"That doesn't mean I think in 2050 that there will be
heaps of video stores left," Mr Uniacke said.
"Download is where it will go in the future. But we
will also have the brands that can take us into that download space in time as
well."
- additional reporting by Rebecca Graham
