I saw a piece about the new CEO at Blockbuster, whose experience in moving toward smaller more agile stores at 7-Eleven suggests a change in the strategy at Blockbuster:
[from New Boss Aims to Apply Some 7-Eleven Tactics to Blockbuster by Andew Adam Newman]
[…]
“The trend in the convenience-store world was we were building larger and larger stores, but the bigger they were, the less convenient they were,” Mr. Keyes said in a telephone interview from Blockbuster’s headquarters in Dallas. “But we ended up generating more sales from a store that was literally half the size.”
Mr. Keyes hopes to make Blockbuster stores smaller on average, too, and to customize titles at each store based on rental patterns, much the way he said a 7-Eleven in one neighborhood might have stocked more Corona and another across town stocked more Coors Lite.
Well, there is no doubt that geolocational differences in viewing habits could be better handled by Blockbuster et al, but it will be difficult to counter the long-tail economics of the Internet just with the convenience of driving by the local corner video place to get… the same damn movies that everyone else ‘wants’ to watch. And ‘wants’ means the movies have been selected the most out of those available.
He’s going to have to have more movies, way more.
One idea:
I have been watching Redbox (a subsidiary of MacDonald’s) expanding into MacDonald’s and grocery stores. The company offers a automated (few employees) box full of movies, which allow the consumer to rent a movies for $1 per day. The boxes, however, are extremely limited in breadth and depth: few titles, few copies. But it is truly a time saver to get the movie at the grocery or at MacDonald’s, and to be able to return it to any Redbox. Its not only a timesaver, its greener: people can drive less.
So as James W. Keyes (the new Blockbuster CEO) moves to revamp and scale down the corner video place, one option is to convert them into gigantic Redbox machines. Imagine a local Blockbuster converted into an enormous video dispenser: twenty or so consoles in the foyer of the store, like ATM consoles at the bank, while behind, the entire volume of the store has been filled with videos… lots of videos.
If a Redbox device — which is roughly the size of a soda machine — can hold a dozen or so copies of a few hundred titles (total guess, by the way), then a Blockbuster-sized mega-Redbox could hold 1000 times as many. While this doesn’t approach the offerings available online — and note that Redbox does support online video rentals, too — it completely shifts the entire experience of video shopping.
The scale of the Redbox set-up is designed around hits: copies of the hot movies, right now. But in a long-tail economy, people want more variety, and will favor experiences that offer it. And it shouldn’t cost more.
And, of course, we get to avoid the experience of standing in line at the store, where the three stressed out part-time employees are trying to help people find a copy of Pan’s Labyrinth in the return box, or talking on the phone, instead of getting us out the door, and back into our idling cars at the curb.
