Peter Imes: How the Internet has changed movie rentals

June 24, 2010 10:33:00 AM

Peter Imes - pimes@cdispatch.com

 

This Friday and Saturday, I will be attending a newspaper conference in Tunica. One item of discussion will be whether or not newspaper websites should install paywalls on their websites. "Paywall" is a self-deprecating term that basically refers to a website subscription. Until recently only very specialized news websites have been able to charge their readers a fee, but some in the news industry are referring to 2010 as "the year of the paywall." According to Layne Bruce, Executive Director of Mississippi Press Association, more than 25 websites in the state have either already started or are planning on charging for access this year. 

 

Preparing for this upcoming discussion got me thinking about other industries that have been radically changed by the Internet. According to the World Bank, less than 10 percent of the population in the USA used the Internet with any regularity in 1995. Today, well over 75 percent of us use it. A lot has changed in those 15 years. 

 

This is the first in a series of columns that explores how the Internet has changed our daily lives. Much has been written in the mainstream media about the struggles of the music, magazine and newspaper industries, but little has been said about the drastic change in movie rentals. 

 

Hollywood Video in Columbus and Movie Gallery in Starkville have "closing soon" banners hanging in front of their stores. To my knowledge, when these stores close, the Blockbuster store in Starkville will be the only movie rental store left in the Golden Triangle. Blockbuster could file for bankruptcy protection any day now, and their CEO has made comments that indicate he does not have a good enough grasp on what his customers want to create the change that company needs. 

 

A handful of services are contributing to making movie rental stores a thing of the past. 

 

 

 

Netflix 

 

A website called Netflix.com allows you to pay a monthly fee to rent movies by mail. Netflix''s catalog of movies includes virtually every DVD ever released. You make a list of movies you want to see, and they mail the movies to you. They even send you a postage paid envelope to return the movie. I''ve been a Netflix subscriber for years, and love the service because of the selection they offer. I pay less than $15 per month and can have 3 movies out at one time. There is no maximum number of movies I can rent per month. As long as you are diligent about watching a movie soon after you receive it and send it back immediately after watching, you can get a lot more bang for your buck with this service versus a traditional movie rental store. 

 

Netflix also has a growing number of movies available to watch over the Internet. These selections can be watched instantly on your computer. 

 

 

 

Redbox 

 

Redbox has installed vending machines- or kiosks- all over the country. Anyone can walk up to one of these boxes, find the movie they want, pay $1 with a credit card, and get the movie from the box-all within about a minute. The movie is due back the next day, but you only get charged $1 for each additional day you keep it. After you are finished with the movie, simply return it to any Redbox in the country. I''ve rented a Redbox movie in New York and returned it in Columbus. Try doing that with a traditional Blockbuster! (I noticed recently that Donut Factory in Columbus now hosts a Blockbuster kiosk similar to Redbox''s. I''m afraid this effort will be too little too late for Blockbuster. They have neither the number locations nor the hype to regain market share.) Redbox is very convenient but typically has a very limited selection at any one time.  

 

As a side note, Redbox is owned by Coinstar. Coinstar''s original business was placing vending machines in grocery stores that would change your coin money into cash. As of this year, Redbox''s profits have exceeded those of the money changing business, and Redbox claims to be responsible for about 30 percent of all movies rented. 

 

 

 

Hulu 

 

Hulu.com is a website that allows you to watch TV and movies over your Internet connection. Though Hulu is free now, they plan on installing their own paywall this year. 

 

The future is movies over the Internet. I took an old computer and, with a $10 cord you can purchase from any electronics store, hooked it to my TV. I purchased a $7 wireless mouse on Amazon.com. I can place a DVD in the DVD drive or watch video from one of the websites mentioned above. This may seem too complicated to some, but it allows me to watch a nearly endless supply of movies without ever leaving the house. 

 

For those less geeky than myself, you can already purchase DVD and Blu-Ray players that connect directly to the Internet and work with Netflix and other Internet-based entertainment services. Simply press a button on your remote control and access a menu of movies to watch. Soon, you will start seeing affordable "smart" televisions with the same capabilities. 

 

Regardless of how you end up watching movies at home, very soon there will be no more running to the video store.

Peter Imes is the general manager at The Dispatch. You can email him at pimes@cdispatch.com or follow him on Twitter at @pimes.