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TK's MORNING BUZZ: Is the 'Chaining of America' in Home Video a Chaining of Consumer Choice?

15 Sep, 2000 By: Thomas K. Arnold

Much has been written about the so-called "chaining of America," in which big chains fat with public or investor money roll out cookie-cutter storefronts and put the little guys out of business.

We're seeing it happen in virtually every market, from coffeehouses (Starbucks) to video (Blockbuster).

But while the results are the same, there are two vastly different approaches, and, sadly, in home video, we appear to be on the losing end.

While it's sad, to champions of individualism like me, to see Starbucks put the neighborhood coffeehouses out of business, they're doing it, in large part, by giving the customers what they want.

Simply put, Starbucks has better-tasting coffee than many of the mom-and-pops it's putting out of business, and the pastries are similarly top-notch (I recently sampled a donut at one of the few Starbucks that carry them, and let me tell you--even Tasty Kreme's got nothing on them!).

Blockbuster, on the other hand, is putting independent video specialists out of business by giving customers what they THINK they want: more copies of the hits, guaranteed to be there.

The fundamental difference is that in Starbucks' case, consumers really like the product and while I haven't seen any figures, are probably spending more on coffee, overall. It's quality that keeps them coming back and makes them ultimately spend more than in the past.

At Blockbuster, meanwhile, consumers have grown accustomed to getting the hits right away, and their video rental habits have narrowed away from the eclectic, off-the-beaten-path "second choices" they used to rent. That's why, in my mind, overall video rental spending took a nosedive over the summer, and is flat, at best, for the year-to-date. It's quantity that draws them to Blockbuster, but also makes them spend LESS than in the past, when the flavor of the week was out of stock and they left the video store with two or three alternatives.

The threat to the future of video rental is very real. By reinforcing the public's natural propensity for the hits, and nothing but the hits, instead of trying to get them to rent other stuff, and more of it, we're setting the stage for pay-per-view and other forms of electronic delivery, which also revolve around a narrow selection of high-profile titles.

In home video's case, the chaining of America is, quite literally, a chaining of consumer choice.

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

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