In modern society, an epic battle is taking place that no one wants to talk about: the battle between laziness and instant gratification. Sad, but true. Picture this: It’s Saturday night, and you really just want to stay in and watch a movie; however, you forgot to update your Netflix queue (or maybe you just watched your most recent flick). You’re on the plan that allows you to stream movies and shows instantly, but we all know they don’t have the new new releases that everyone else somehow had time to see and is now talking about.
Here’s where the need for instant gratification kicks in: Now, you need a place to go to rent the hot new release you suddenly know you won’t be able to go to bed without watching. Enter ye olde Blockbuster store, those quaint establishments that were as prevalent as Starbucks in the late 1990s. Yes, a few of them are still around, and one man is counting on our need for instant gratification to win out over laziness (i.e. having to leave our homes to procure said must-have film) to save them.
Greg Meyer has been warning the company about their demise since 2005 when he first wrote a letter to the Blockbuster board of executives asking them if they would like to get it on his new business venture: DVDXpress. Meyer suggested that Blockbuster start putting DVD rental kiosks outside of all retail locations — similar to the Redbox ones now found at many grocery stores — to increase revenue when stores were closed and allow the company to reduce stores’ operating hours during the slowest times of the day. Blockbuster never wrote back
Five years later, Redbox and DVDXpress have merged and become hugely successful (and Coinstar, Redbox’s parent company, doubled its revenue thanks to the kiosks), and Blockbuster is being mocked by The Onion as a relic of the past. Oddly enough, however, Greg Meyer still has a vested interest in saving Blockbuster, of which he now owns 650,000 shares.
Meyers’s latest plan to save Blockbuster hinges on an important deal that Netflix and Redbox just signed with two major movie studios, Fox and Universal. Netflix will delay releases from those studios for 28 days in order to maintain its access to movies for their instant streaming service. Redbox agreed to the deal because, well, they kind of had no choice. The studios are of the belief that modern-day consumers are such gotta-have-it-now creatures that they will buy the DVDs on the day they are released if they are not yet available for rental through Netflix or Redbox.
Meyer, of course, sees the flaw in this plan — and how it can help keep Blockbuster in the black. Most people don’t want to own the majority of movies they rent; they only want to watch them once. Since Blockbuster didn’t sign any 28-day delay contracts with studios, they’ll be the only game in town to have new releases available when they’re actually “new” releases.
In addition to pitching a new marketing plan hinging on the notion that Blockbuster has movies 28 days before every other rental service, Meyer also thinks the chain needs to rethink their current pricing structure. Netflix and Redbox work because they’ve managed to convince users that their late fees and membership/rental costs are almost negligible in comparison to the utter convenience of the services. With Blockbuster, you still have to go to a physical store and fork over almost $5 to a surly teenager (at least in my experience) who smirks when you rent that cheesy romantic comedy (I didn’t ask for your judgment, just my movie, thanks).
Blockbuster will shutter 1,000 stores in the next year, yet Meyer sees this as a chance for the chain to emerge leaner and stronger. He has pitched a new pricing structure for catalog titles to encourage customers to walk out of the store not only with the latest releases, but also with an old favorite for just $2 more. He also believes the store should continue their kiosk and online rental strategy to cut down on store costs. Who knows; with Greg Meyer’s help, Blockbuster stores may make it after all. But tread lightly, he warns: “Is it possible? Yes. Is it easy? No. First, the patient needs to be stabilized.”
Photo by naotakem via Flickr.