THE MORNING BUZZ: The V in VOD Still Stands For Vaporware10 Dec, 2001 By: Thomas K. Arnold
A high-ranking home video executive recently confided in me that his parent company may be rethinking its grandiose plans for video-on-demand. There's been a lot of research and a lot of development, both entailing tons of money, he said. The upshot?
"There are still questions whether it will even work, regardless of how far technology advances," he said. "You have to change consumer behavior and consumers like to rent videos."
That was the first stated sign of doubt from any studio honcho, but I have to wonder: how many others are thinking the same thing--moreover, how many have been thinking the same thing, but have been too politically correct to say so?
VOD is Hollywood's golden dream and, in a town that likes to think it can make dreams come true, VOD is the next big thing in home entertainment. And yet money and technology--the twin pillars of Tinseltown with which, common thinking goes, anything is possible--might not be enough.
Consumers like to rent videos. Satellite didn't kill video rental and DVD didn't, either--indeed, a burgeoning rental market for DVD developed despite the studios' best efforts to kill it, or at least stunt its growth.
So why does video rental get no respect? Wal-Mart this quarter is attacking the very rental concept, pitching its budget videos at the renting public with the tagline, "No Late Charges...You Own It."
Even Blockbuster, the king of rental retailing, is putting all its fourth quarter promotional eggs in the gilded DVD basket, touting its stores as "the best way to DVD." No mention of guaranteed rentals or extended rentals or anything rental, for that matter--just the implication that whatever you want to do with DVD, Blockbuster's "the place."
Maybe, just maybe, renting a video isn't such an outdated concept after all.
Sure, it can be a hassle, particularly if you have to make a return trip, but what isn't a hassle these days? Spending half an hour in line at the bank is still a preferred alternative to millions of consumers who don't want to bank online; grocery delivery services are dying because people still like to squeeze the Charmin.
Renting a video, for many, many people, has become more than a habit. It's become a way of life. And no amount of hype about the convenience of e-commerce may be able to change that.