It really shouldn’t be news to anyone that a lot of businesses have been having trouble during the current world-wide health crisis. Even if I were to tell you that the pandemic has driven an entire industry into extinction, you probably wouldn’t be surprised. But if I were to tell you that the industry in question was video rental stores, your reaction would more likely be: “There are still video retail stores?” Regrettably, the answer would appear to be: “Not anymore…”
Two stories appearing on the MSN.com site this week give an idea of where the economy is going these days, and the news isn’t very reassuring. First up, a story that originated in The Washington Post details bankruptcy effects in a number of industries during the last year, some of which have seen double or triple the number of Chapter 11 filings from the year before. Even more disturbing, though, is the corresponding rise in Chapter 7 filings. Companies can come back from Chapter 11, or at least make an effort to raise money, find backers, or sell off assets, but Chapter 7 means you’re not even trying to do anything more than liquidate the company and turn out the lights…
In the midst of all of the restaurants, retail stores, shared-space ventures, business incubators, entrepreneurial start-ups, and entertainment ventures that are going under (or at least circling the drain), you may have missed the story about Family Video, the last known multi-unit video rental company, having to shut down operations in January. Compared to behemoths like Blockbuster or Hollywood Video, Family Video was a relatively modest operation, but the fact that it was still in business years after all of the other chains were long gone suggests that their story might be worth a closer look…
According to the story which originated in Newsweek, Family Video managed to avoid the fate of companies like Blockbuster through a combination of strategies that included unconventional asset allocation, unrelated diversification, and selection of otherwise underserved markets – which is to say, purchasing the buildings in which their stores were located instead of renting them, building pizza stands into the same business space, and putting the stores into smaller communities where other forms of entertainment are limited and many residents can’t afford cable or satellite service. None of these are particularly complicated or innovative, but the fact that Family Video used them while their competitors did not goes a long way towards explaining why they were still operating in 2021 while their competition closed down years ago…
Now, I’m not suggesting that anyone should be upset at the demise of video rental stores, or the industry in general. Streaming video services are cheaper, more convenient, offer more viewing choices, and these days even produce their own exclusive content. There was never any real question that the days of any business requiring you to pick up and return physical media were limited from the day the first pay-per-view services appeared back in the 1990s. But as the linked article notes, this latest business failure is going to put another 5,000 or so people out of work, and eliminate one of the only entertainment options available, in a large number of communities that are already being hit by an economic disaster potentially as destructive as the health disaster currently ravaging much of the world…
When I think back to the days – not that long ago – when the big video rental chains were powerful enough to influence which movies and television programs got funded, or advertised heavily, it can be hard to believe that they’re gone now. But the same can be said about record stores (and, increasingly, bookstores), soda fountains, full-service gas stations, video arcades, fondue restaurants, resume writing services, and many others, and the world goes on without noticing or caring in the slightest. It makes you wonder what other common business types won’t be around in another ten years – and what world events will finish them off…
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