Netflix to kick Blockbuster off the block?

Some of my fondest memories as a child are of running up and down the aisles of the local Blockbuster trying to find the best movie or video game. In fact, simply hearing my mother say, “Want to go rent something at the store?” was all it really took for me to be filled with a happiness that I, to this day, don’t quite understand. Yet, with the steady rise of online rentals and ultimately the downfall of the local video store, that happiness is starting to make more sense.

When Netflix entered the market in 1999 with its mere 1,000 rentals, I never thought anyone would ever trust, let alone popularize, such an inane idea. It was only after a year of coming home to find movies waiting in the mailbox that I realized how brilliant the concept truly was.

Netflix now has over 70,000 DVD titles to pick from, and they are still only getting started. Every day, one million DVDs are shipped across the country (if you stacked that many DVDs each day for a week it would be taller than Mt. Everest). In its 8-year run, Netflix has acquired 6.5 million subscribers who, according to Netflix, rent twice as many movies per month than they did prior to joining.

While Blockbuster still has far greater revenues than Netflix, they have also watched those revenues fall in the past few years. Blockbuster has entered the online market with their Total Access plan (i.e. renting movies online and returning them at a local Blockbuster for a new movie immediately), but Netflix still dominates the online market with over four million more subscribers.

Nevertheless, stock market analysts don’t see Blockbuster simply disappearing any time soon.

“Blockbuster’s not going away,” said Rick Munarriz, senior analyst at The Motley Fool. “Right now, they’re that wild kid at the party who’ll swallow the live goldfish. You just don’t know what he’s going to do.”

The Total Access plan is a good sign of where they are going and might be all that’s holding Blockbuster together when it comes to competing with Netflix in the long-run. Dear old Blockbuster, a company whose stock was traded at $24 six years ago, is now trading at a mere $4 to $6.

While Blockbuster continues its hurried, yet strategic game of catch up, Netflix is marching forward. Last month, Netflix announced that by the end of June, Netflix subscribers will be able to go online and watch streaming movies without any extra charge.

Still waiting for your movie to arrive in the mail? Netflix will have over 1,000 movies waiting to be streamed to your desktop for free (with a few restrictions on how many hours you can watch a month). Unlike Apple when it comes to providing video online, they already have all of the big studios involved: NBC Universal, Sony Pictures, Metro-Goldwyn-Mayer Studios, 20th Century Fox, Paramount Pictures, Warner Bros., New Line Cinema and Lionsgate.

All the while, Blockbuster and Hollywood video are scrambling to put massive signs outside their windows screaming in painfully bold and red text, “NO LATE FEES!” and “ALL MOVIES FOR FIVE DAYS!” You can almost hear the echo.

But what type of a world are we moving into? The most important question to ask during any transition into the digital age is “What are we losing?” In the case of online rentals, there isn’t anything physical that we are losing. If anything, we’re retaining money with cheaper rentals and we’re also not wasting gas driving across town to return a movie.

What we are losing, however, is the experience. There is something about the experience of walking into a Blockbuster (or even a blatantly named “Video Rentals” store) and perusing through hundreds of DVDs.

I can admit that there have been many times where I have spent over an hour in a video store and left empty-handed, yet still satisfied. Each aisle has with it countless memories; each DVD box you pass brings back emotions of laughter, sadness, fear and even confusion. Memories of someone you might have watched a certain film with may even return.

Whether we consciously recognize it or not, film, television and music are all central to our lives; with each song or scene we experience comes a series of memories and emotions that constantly play in slideshows in our minds. It’s a simple stroll down the aisle of a video store that ignites these memories and ultimately gives a surreal experience in an unlikely place.

Yet now it seems as though we must wave goodbye to one of our greatest memory vaults.

The online rental business will continue its divergent evolution with the movie, television and video game industries as they all move online and it will certainly be for the good of our pocket books. At the same time, however, let us not forget how our love for convenience can also mean the death of those “little things in life.”