Business - Written Monday, March 3, 2008 by Naumi Haque - 7 Comments

Blockbuster Video – The Next Casualty of the Digital Era?

Chances are my kids will never know what a video rental store is; at least not in the traditional sense. With companies like MOD Systems and PortoMedia, not to mention iTunes Movie Store, it seems as though the days of riding your bike to the video store to rent (or return) a movie are over. The idea of a movie title being “all out” also seems preposterous in an era where physical media is giving way to infinitely replicable bits and bytes transferred online or via a MovieKey.

The Economist ran an excellent article last week, “Hollywood and the Internet: Coming Soon” that highlights the issue and talks about the opportunity for major studios to take advantage of the Internet revolution. Using online delivery mechanisms and direct-to-customer models like video kiosks the efficiencies ultimately lie in cutting out the video store middleman.

In the short run, retailers like Blockbuster will be squeezed by video rental kiosks that deliver “self-destructing” movies via flash drives. These kiosks can hold thousands of movie titles that are never out-of-stock and can upload them to portable keys in mere seconds – think ATMs for video rental.

Image source: MODSystems.com

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