Internet Based Businesses Are the Future!

When I was about 7 my mum used to take my sisters and I to the local video store, Superstar, maybe once a fortnight. There were no Internet Based Businesses in those days. Superstar was a family run small business, no glitz no glamour, just the movies.

This was a massive treat! We could spend hours looking and disagreeing on films until we finally came up with the one VHS video that everybody could watch, something like The Goonies, Turner and Hooch or Ghostbusters; now they were films!

Then out of nowhere, with all the glitz, glamour and red carpet treatment, Blockbuster rolled into town. They had a fancy shop, dozens of copies of every movie and Hagen Daz ice cream. In comparison to Superstar it literally felt like Hollywood!

There are only so many times you can go to Superstar, find they haven’t got the latest movie available, the one you really want to watch, then take home your second or third choice film and continue to go back. So eventually their customer base, including me and my family, walked up the red carpet to Blockbuster and never looked back.

Overnight, Superstar which had been there for what seemed like forever was out of business. That was a good 25 years ago.

The other night my girlfriend said that she was going over her friends, they were going to go to Blockbuster rent a movie and get take out. My first reaction was one of astonishment.

“Nobody rents movies from Blockbuster anymore, do they? It’s all internet based businesses that post the movies to you, or Pay Per View on Cable. ” I said

Since flying the nest over 13 years ago, I have never been a member of Blockbuster. I just haven’t seen the need to. As far as I was concerned there were always too many alternatives that were far more convenient. In the town that I have lived in for the past ten years there has always been a Blockbuster and I have never rented a movie.

So my girlfriend and her friend go to Blockbuster. 10 minutes later I get a call from her saying, “Blockbuster is closing down tomorrow and they are selling all the stock, do you want any cheap DVDs?”

Now, I love movies, given the chance I could probably watch a movie every night. So I said if they have any of the classics, (meaning anything starring De Niro or Pacino) then just get them. Anyway, the classics to my girlfriend mean something completely different (she will only watch RomComs!) so we agreed that I would go the next day and see what was left.

I went along first thing the next morning and I picked up about 30 DVDs, mainly world cinema such as films made in Korea and Hong Kong, for less than a pound. I often find their movies to be more original than Hollywood. Oh, and of course we did pick up a couple of romantic comedies to keep the misses happy!

I took the DVD’s to the counter and I got chatting to the store manager and the reason why they were moving out of town was because the rates and rent for the premises were around forty thousand pounds a year. That is a lot of DVD rentals and popcorn.

Now if you follow business news you will know that Blockbuster has been up against it for years. In the US, at the back end of 2010 they filed for Chapter 11 and the European arm of the business is straddled with crippling debt. Sure they have a massive brand, but has their reluctance to adopt change cost them too much?

The home rental market has changed dramatically; it is dominated by internet based businesses. Most people opt to use online rental facilities such as Netflix, or have used there on demand cable facilities to rent a movie as and when they want it. In fact supermarkets, which have huge volumes of footfall often have dispensing machines in store where people can rent DVD’s while they are doing their shopping.

On a Friday night when you have been in work all week the last thing you want to do is get up off the sofa, drive down to Blockbuster, spend half an hour arguing, sorry, “discussing” which film you are going to get, stand in the queue for 10 minutes while some guy in front of you remonstrates with the cashier as he has forgotten his card and they can’t find his details. It just isn’t fun!

Blockbuster do offer online rentals but it has been far slower than other internet based businesses to adopt this line of distribution and as such has been paying the price.

Whatever line of business you are in you need to continually refine your distribution channels based on your customer needs. If your customers don’t want the hassle of going shopping then you need to make it easy for them and provide an online facility for them to do it. The fact is if you don’t, then there will be internet based businesses that will.

The current economy is testing traditional business models to the extreme, property rental charges are increasing, rates are rising, banks are tightening their lending belts and more and more customers are buying online. Internet based businesses are the future and business owners that do not react now, face being turned away from the show.