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TK's MORNING BUZZ: Relying Solely on Video Rentals Is No Longer Viable for Video Stores

20 Dec, 2000 By: Thomas K. Arnold

I just finished compiling Video Store Magazine's annual "year in review" issue, more than 6,000 words of clips and snippets chronicling one of the most topsy-turvey years our industry has ever experienced.

If I had to single out a single theme for 2000, it is this: That retailers of all stripes are struggling to adjust their tried-and-true business model because relying solely on video rentals is no longer viable.

We've seen Blockbuster start selling satellite systems and service in its stores, as well as launch a video-on-demand service in which movies are delivered over the Internet.

We've seen independent retailers beef up their DVD inventories and diversify into other products and services, from pizza and games to movie merchandise and photo finishing.

And we've seen Best Buy gobble up the nation's top music chain with the express intention of turning nearly 1,000 mall and rural stores into what my colleague Bruce Apar calls "e-plex entertainment emporiums," storefronts that freely mix home entertainment software and hardware to become one-stop destinations.

After years of talking about "convergence," retailers are turning talk into action.

The old video store, which relies solely on the rental of pre-recorded videocassettes, is truly an endangered species. I just hope the scores of stubborn video rentailers who have resisted and fought any type of change take note and act accordingly.

It's a whole new world out there, and only the strong, the resilient, the adaptable retailers will survive. Not every new strategy, not every radical departure from the norm, will work.

But neither will sitting still.

Comments? Contact TK directly at:TKArnold@aol.com

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