At the PMA photo industry trade show in Las Vegas Jan. 31-Feb. 2, disc duplication and printing equipment vendor Primera pounded another nail into the coffin of brick-and-mortar retailers who obtain the bulk of their profits from selling DVDs and video games.
Primera debuted its Retail-Ready DVD on Demand solution, which provides customers in-store touch-screen access to movies, television shows and video games that are instantly burned, printed on a disc and dispensed via the Primera Bravo XRP Disc Publisher. Primera intends to start implementing the system at major retailers later this year.
Okay, so in theory this solution may actually drive higher in-store traffic in the short term because of its convenience and the sheer curiosity factor. But taking a not-so-long-term look at what this solution represents, it is the next step in the unstoppable march toward obsolescence for the Hollywood Videos and GameCrazys of the world.
Let’s be honest, folks, how many years will it be until customers are routinely bypassing the kiosks at their local neighborhood DVD/video game retailer and just downloading and burning this stuff right at home? The kiosks will even serve to educate less tech-savvy consumers about how easy downloading this type of content really is, and sooner or later the light bulb will switch on and they’ll realize it’s something they can also do at home.
Wal-Mart has already experimented with direct consumer downloads of DVDs, and Amazon currently offers its Unbox service that lets customers digitally buy or rent DVDs online. Plus the major networks make episodes of television shows available for download, often for free. There has not been quite as much movement toward home download in the video game market, but there have been some rumblings that are not likely to quiet down.
In a free market society, customers ultimately get what they want, and they don’t want to spend unnecessary time at a store or unnecessary money to cover the costs of manufacturing, packaging and physical distribution. Furthermore, the popularity of home delivery services such as Netflix and Blockbuster Total Access makes it clear that consumers do not view their local video store as a “third place” in their lives, a la Starbucks.
Options for DVD/ video game retailers
So what options does the poor DVD/video game retailer have in the face of burgeoning download technology? One is to expand their e-commerce capabilities, as Blockbuster has done with Blockbuster Total Access, and then gradually shift their business model along with the market’s shift to all-online digital retailing.
The other major option is to expand their in-store product offering. Music retailers, who have been dealing with slumping sales in the face of exploding home digital downloads for several years, are already taking this approach.
For example, if you walk into a store location of Newbury Comics, a music chain with a large presence in New England, you could easily think you had accidentally wandered into Hot Topic or Spencer Gifts. While CDs (and DVDs and video games) still take up the most floor space, Newbury Comics also sells a dizzying variety of clothing, memorabilia, and novelty items such as bobblehead dolls and plastic Tiki torches. As CDs and their ilk increasingly become digitized, Newbury Comics has a shot at repositioning itself as a youth lifestyle retailer more in the vein of Urban Outfitters.
And a final note to the technologists. In a press release, Primera boasts that its burned discs offer “virtually the same reliability, compatibility and security as mass-produced titles.” That may satisfy Joe Average, but do you really think a die-hard “Star Wars” fanboy or “Grand Theft Auto” junkie will accept something of “virtually” the same quality as what is currently available as a mass-produced item? These are the type of people you must convert to truly succeed in your digitization efforts, so put a little more R&D into your content creation and delivery capabilities. You’ll be glad you did.
Dan Berthiaume covers the retail industry for eWEEK. For more stories, check out eWEEK’s Retail site.