Lackluster Video

Could Blockbuster be the Antichrist?

Suppose you were to ask me, “Rob, who do you think the real rulers of the world are?” You might expect my answer to be the United States President, the Pope, the Saudi oil barons, or other such luminous Illuminatus. But no, I’d have to go with a different set of shadow leaders, a “Pentavarate” of social engineers, if you will. In no particular order, I believe the top five propaganda ministers of the New World Order to be:

  1. Disney (Family Entertainment) From amusement parks to movie studios, cartoons to TV, the mouse is a tycoon. He’s a long way from Walt’s original utopian dreams. But such is the march toward monopoly. Now his children and Eisner have soiled the Magic Kingdom. In the 80’s the Religious Right got up in arms over Disney’s support of the gay community and staged boycotts. Always concerned with the bottom line, Disney has regained its support with more “family friendly” entertainment over recent years. They’re in the game of world domination for keeps. (See here for more about Disney’s timeline)
  2. Microsoft (Software Giant) Microsoft dominates 98% of the computer operating system world market. They’ve all but run out of ways to keep generating continual revenue, beyond even their normal product updates. Recently, they’ve begun a new paradigm in software licensing known as Product Activation, wherein the company knows what kind of computer you have and what it has in it. Over the years, Microsoft has dabbled in hardware and other platforms to expand their market share. That’s a trend that won’t change if the company is to remain profitable.
  3. Clear Channel (Radio Monopoly) Clear Channel has gobbled up nearly every radio station across the country. Their acquisition is cross-genre. Chances are, most if not all of the stations you listen to are now Clear Channel stations. And now that the FCC is becoming more proactive, Clear Channel is more than happy to be the front runner on a new generation of first-amendment censorship. Here comes the police state.
  4. McDonald’s (Fast Food Franchise)“Quarter Pounder, Big Mac, Fillet-‘O- Fish, french fries…” Heart disease, obesity, clogged pores, oily skin! Leading the pack of this generation’s Big Tobacco is obesity magnate McDonald’s. They are of course a household name. But the tide is beginning to turn when our morbidly fat children’s health is on the lines. And never get between a parent and their pro-entitlement lawyer. Mmmm, smell the deep-fried lawsuit? This food giant may be in for a long battle of corporate reorganization.
  5. Viacom (Media Mogul) Viacom owns TV stations, movie studios, news stations, video stores, etc. Viacom’s outdoor advertising subsidiary is the largest in North America. Viacom Television Stations Group owns and operates 39 TV stations. In 1994, Viacom acquired Blockbuster Video from Wayne Huizenga for $8.4 billion. (See here for more about Viacom’s timeline)

These masters of monopoly have been threatening free market ideology for some time, while etching their services and/or products into the social psyche. Some more mainstream (McDonald’s, Disney, Microsoft), others more clandestine (Clear Channel, Viacom), yet their goal is the same: corporate globalism. These companies aren’t particular; certainly the list could be longer, but these few serve as an indicative sample size. With each passing year, these companies continue to either: 1) usurp and consolidate, or 2) expand their territory. Accordingly, consumer choice dwindles.

Case in point: that fifth entry, Viacom, recently acquired Blockbuster Video, easily an up-and-coming player in the arena of world domination. Blockbuster was born in my backyard, of sorts. The Dallas-based movie rental venture has become a formidable power bent on market saturation. With Viacom’s deep media ties, Blockbuster began some shady revenue-sharing deals with various Hollywood film studios. The scheme allowed them to purchase discounted movie titles from the studios to meet high customer demand, while the studios took a piece of the revenue pie. Needless to say, this little Ponzi pyramid landed the Blockbuster cronies in court. Several smaller independent video rental stores claimed that Blockbuster violated antitrust laws by leveraging its media prowess to drive them out of business.

But wait, there’s more!

The onward march to monopoly has taken a new and diabolical urgency. In efforts to forever squash competitors like Hollywood Video, I have it on good sources that Blockbuster has invested in a huge database containing nationwide demographical data. Such information (population, ethnic composition, average family income, movie spending habits, etc.) is used to determine precisely where a store would best penetrate the market, and how best to stock the shelves in particular stores. Benign market research, or privacy violation? You decide.

One thing is for sure: the more you rent from Blockbuster, the more cross-referenced categorical data they can add to their coffers. And the less you rent from Blockbuster, the more annoying coupons they send you to reel you back in.

Besides being a member of the Evil Empire, I believe the current paradigm of video renting is flawed. To its credit, Blockbuster does not have the distinction of inventing this system. But it has added some of its own “innovations” that have forever made the experience of renting a movie an infuriating endeavor.

To start with, there is the Cattle Line. This is the single-file mass of people, naturally shuffling along the outer perimeter of each Blockbuster store in search of the perfect “New Release” video. Here, Blockbuster places all newer movies (read: no older than 2-3 months unless the video is deemed a “blockbuster,” in which case it will likely remain on the “New Release” cattle wall for all eternity).

The Cattle Line surrounds all the other rows of older titles, the underprivileged non-“New Releases.” Once upon a time, these inner sanctum rows contained a fairly well-organized set of titles, almost as if the store was genuinely catering to the consumer. Sections included “Classics” as well as “Comedy” and “Drama,””Musicals” and “Horror.” Most of these categories have now been eliminated. The rationale behind such an asinine liquidation, I assume, could only be either:
1. If the film’s budget was under $100 million, why would you want to watch it? 2. If the film’s older than 6 months, why would you want to watch it?
Now whole sections have been eliminated, resulting in a hodge-podge of films that have no real similarity. The Maltese Falcon can be found next to Big Mamma’s House. Replacing these once vital (and logical) movie sections, Blockbuster in all its wisdom donated large bound compendiums. Resembling a library reference, these only do so much good as the volumes get tattered with excess use.

I submit to you a clear alternative to the Blockbuster Cattle Lines. I suggest a renting experience the likes of which the typical Blockbuster teenage (and most likely film ignorant) employee can’t provide. I offer: Netflix, a completely online renting solution.

To be sure, this is a radical yet refreshing departure from the Blockbuster paradigm of movie rental. For starters, Netflix has no stores. That translates to less overhead for further savings to the consumer. The portal to renting from their vast inventory (about 12,000 titles) is the Internet, thus empowering the consumer with the ultimate in satisfaction: control. I can search for a movie by title, director, actor/actress, genre, etc. All this data is cross-referenced so I can do 6-degrees-of-Keven-Bacon searches too. You know the scenario:

Ok, I can’t remember the name of this movie, but it was directed by that guy who did The Untouchables (answer: Brian De Palma). Oh, and it had Al Pacino in it too (cross-referenced answer: Carlito’s Way).

Or how about an even more complex example:

I’m sort of in the mood for a Hitchcock thriller movie tonight, but I don’t want a Hitch movie. And I certainly don’t want some new release either! From the “Thrillers” sections, Sleuth could be perfect.

By stark contrast, Blockbuster’s site remains a vast wasteland of titles, none of which I can actually rent. Why would I want to buy a movie from Blockbuster if I go there with the express intent of renting? Searching for a title on their site does me no good. I can’t find out which store will rent the title, how much the rental will cost me, how long I can rent it, etc. Essentially, the online presence is completely autonomous to the land-locked stores. The left hand doesn’t know (or doesn’t care) what the right hand is doing.

Second, Netflix turns the current rental model on its head by abolishing the notion of “late fees.” By now, it is quite likely that everyone on the planet is aware of this intrusive concept. You know the drill:

  1. You rent a movie
  2. You’ve got two to three days to return it
  3. Oh, by the way, the day you rent it is considered one full day, no matter when you get it!
  4. You return it late and you’re dinged a late charge.
  5. Each day you keep it over the due date you get the full rental fee assessed to your account, even though it might be within the next rental period!

With Netflix, there is no such thing as a late movie. Instead, their rental structure is treated as a club with membership dues. Netflix is a subscription-based service. Pony up ~$20 every month and rent as many movies as you can watch. The movies are all DVD, so the shipping charge is small enough that Netflix can absolve the cost incurred. In fact, they include return shipping for free as well.

As you can tell, I’ve been fed up with Blockbuster for some time now. More importantly, I’ve been tired of the current movie renting paradigm even longer. Hence, I’ve been a Netflix member for over a year now and I’m here to report on my findings of the service.

I’ve assembled my rental history from Netflix into an Excel spreadsheet for analysis:

The above charts may require some explaining. The “amortized percentage” is a calculation of the rented DVD’s cost compared to one month’s club fee. It differs from the Club Fee Percentage in that it takes into account the number of months, and hence, the number of club fees incurred during that DVD’s rental period. For instance, if I rented Movie A and didn’t return it for three months, then the actual percentage of my club fee that I have paid just in that one DVD would be over the span of three months’ fees, not just one.

Curiously, the postal delay doesn’t make any difference in the actual Cost Per DVD, though it does change the theoretical DVD price. This is because the ratio of the DVD price to the postal delay is always the same; therefore, the actual DVD cost remains the same.

Price includes 4 DVDs in transit at a time. Assuming 30 days/month and a minimum of 5 days turn around time for shipment of DVDs, that gives us a maximum of 24 DVDs per month. I watch a lot of movies, but definitely the ceiling. That would give us a baseline of 90 cents per DVD.

To recap, the pros with renting from Netflix as I see them are:

  • You can rent just about anything (certainly anything that Blockbuster carries and a whole lot more) including a wide selection of indie film, anime, foreign, documentaries, etc.
  • No late fees!
  • Relatively low cost per DVD. The longer you keep the movies, the higher the cost. But it’s still lower than Blockbuster’s late charges!
  • Control. There’s nothing more enticing than the ability to do my own research during the rental process. I can’t do that inside a Blockbuster store. Yet. I’m sure they will wake up soon enough.

The Cons:

  • No rental spontaneity. You can’t just pull up to a ubiquitous neighborhood store and rent what you want. Because of shipping delay, you have to plan out your rentals ahead of time (or you might be in for a boring weekend!).
  • Rental exhaustion. Again, this is more a Netflix versus Blockbuster paradigm. In the Netflix world, you potentially have a constant flow of movies. Being a subscription service, it’s necessary to continue renting to maximize your rental value. With Blockbuster, you choose to rent when you want to rent without penalty. So if one month is busier than usual, you could opt to not rent anything. To be fair, Netflix does offer subscription suspension for those hectic times, or even smaller rental memberships consisting of 2 movies at a time for half the price.

So with all this information, what’s the best choice? For me, it’s clear. I much prefer the convenience and, more importantly, the choice of Netflix over Blockbuster. Given its bullying tactics in the movie rental market, Blockbuster has lost all luster. And I’m not the only one that hates the company. There’s a whole site devoted to the sport! And this guy’s got some great analysis on Netflix’s renting habits.

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