Blockbuster evolved, moving from cassettes to discs, and from films to a range that included games, TV series and an unhealthy amount of sweets and chocolates. That kept them going for a while - but about 8 years ago a severe blow was struck by a new entrant - Lovefilm
Lovefilm operates in a very different way to the traditional video rental companies like Blockbuster. Disc only - for films and games. No retail outlets - customers/subscibers receive films and return them via mail. Films have no time limit, and you can choose a package to allow you a fixed number of titles at home. You pay by the month, not by the film.
Plus points - no need to watch a film the night/weekend you rent it. No having to return the films to the retailer you got them from. Subscription means you know exactly how much you will be paying. Management of your films/account online 24/7. Downside? You queue films, but can't be sure of which ones you'll get. There will probably be a two day delay between a disc being dispatched and it ariving in the mail - the same the other way as you return discs.
This model was replicated by other firms - most notably Amazon. Over time though, through brand building, stock management and superior customer services, Lovefilm bought or defeated most rivals - even taking over the Amazon service. Poor old Blockbuster has tried to catch up, but never quite managed it. I'm afraid I don't hold out much hope for their survival in the long term.
Lovefilm came to dominate their market by taking advantage of possibilities allowed by adopting a different supply chain. They in turn though are coming under pressure from technological developments - namely, digital distribution.
Consumers now have a number of options to receive and watch media they haven't had before. The BBC iPlayer, Freeview/Sky boxes with ability to revord HD programmes and of course internet based distribution - legal or otherwise!
A recent option is the new Apple TV product. Why wait for the film in the mail when you can select and view it within moments?
Lovefilm haven't been caught out by these developments, and now offer films to view on your home PC as well as discs in the mail. What remains to be seen is if this hybrid approach can compete against purely digital distribution - and the ability to conveniently watch on the living room TV, rather than a computer screen.
Not to worry the Lovefilm management, but I've been a subscriber since 2002, and I'm now thinking of cancelling.
Apple TV? Lovefilm is already available on internet enabled tv's. Samsung, Sony and even Playstation 3.
ReplyDeleteJungle,
ReplyDeleteI'm sure that is true. I also think Lovefilm is adapting more quickly and intelligently than Blockbuster did, but:
I think the consoles are limited in their definition/resolution? Is it 360 as opposed to 1080? That might change with the next generation of consoles - if there is a next generation of consoles.
If you don't have an Internet enabled TV, it is probably cheaper to buy an add-on box than a new set.
My pick as the key difference though is that Lovefilm must support the physical media simultaneously with offering the digital distribution. That costs.
A topic for a later post perhaps - but if you are Sony, 20thCF or Universal, you might now be wondering why you need these intermediaries at all?