Xtra-vision and independent store Moviedrome’s response to online distribution and Netflix

| May 17, 2012 | Comments (0)

In Film Ireland 141 summer 2012 Niall Kitson checked out the new wave of online distribution services such as Netflix and Volta. But what about the future of the traditional ‘bricks and mortar’ film rental stores in Ireland?  Simon Bourke examines how national chain Xtra-vision and the independent Moviedrome in Limerick City have evolved to meet the challenge.

 

In a rather ironic twist of fate, the passing of the SOPA legislation in Ireland followed hot on the heels of the arrival of Netflix, the online streaming service which became available to Irish customers at the turn of the year. Amid much controversy the SOPA act was pushed through and verified leaving an open door for the new kid on the block to hoover up all those battered into submission by the legislation. Early figures suggest that for many, the decision to move to Netflix was an easy one with a take up described by Netflix CEO Reed Hastings as ‘the highest net additions [of customers] we’ve ever seen in the first 90 days of an international market launch‘ points to an audience all too keen to embrace this new form of home entertainment.  But while consumers have been digesting this change in the landscape of online movie viewing there is a much wider debate which needs to be examined. What is to be the fate of the ‘brick and mortar’ store? The rental store which for so long has been the bedrock of our communities but now faces up to the kind of challenge it has never faced before.

 

So has the arrival of the on-demand internet streaming site caused panic and dismay among those at Ireland’s leading Home Entertainment Store? Not so says Director of Business Development at Xtra-Vision, Brian Gilligan, ‘We haven’t seen any decline in revenues due to the launch of Netflix. This is understandable as Xtra-vision’s business is very different to that of Netflix in that the vast majority of rental transactions in Xtra-vision are on new releases’. Therein lies a key issue which is preventing Netflix from cornering the market and driving rental stores out of business. The quality of its content. If you only wish to watch TV shows then Netflix is a godsend, with programmes ranging from the Emmy award-winning Breaking Bad to the most obscure BBC productions there is something for everyone.

 

However its content is more limited in comparison to the US Netflix, with a lack of recent movie releases.  Paul Flynn, who owns and manages Moviedrome in Limerick City, is not overly concerned, ‘Bring it on’ he claims, ‘I don’t mind fair threats, I’ve outlasted them all’. It is the lack of new content on offer which Paul believes will ensure his survival, ‘There’s no way they can make money at €6.99 a month and provide new films, it’s unfeasible. It becomes a threat once they start showing new stuff but then they’re going to have to start charging €20 or €30 a month and so on’.

 

But aside from the lure of new releases what else can the traditional rental store offer to ensure consumers keep coming back? In the case of Xtra-vision the answer is to offer more than just movies, to offer a one stop shop for all your night’s entertainment and an experience which only the cinema can rival. By offering deals involving popcorn, soft drinks, ice-cream and various other confectionary there has been a concerted attempt to make a night in watching movies ‘more of an event’ which Brian attests to, ‘The various bundle deals have proven extremely popular with customers. It makes the movie night-in more of an event, and because we work very closely with our suppliers to put these deals together we are able to offer fantastic value’. No longer can they afford to be considered as just a film rental store and the myriad of phone offers, televisions for sale and gaming consoles which adorn their shelves are further proof of that.

 

Paul is in no doubt that were it not for the level of service offered by he and his staff, Moviedrome would have been out of business years ago ‘You can’t beat personal contact’, he says, ‘If we didn’t provide that kind of customer service I don’t think we’d still be here. There is a sense of community in this store. Customers come in and chat about the films they rented.’ It is in many ways a mecca for film-lovers and while Netflix can offer streaming at the touch of a button it can never hope to replicate the experience of chatting with fellow film fans about the movies you love.

 

But what of the SOPA legislation? Paul welcomed it, ‘I was delighted to see it, something had to be done. I don’t think people understand that free has a consequence. We all need a reward because without that reward the creative process would come to a standstill’. But like many others Paul is still sceptical of the impact the SOPA act is having, ‘I think 99% of everything downloaded at the moment is still illegal’, he says with a sigh. The SOPA act may serve to dissuade the more cautious among us from viewing illegally sourced material online but for the vast majority it is simply just a matter of hopping from one site to another until they get what they want.

 

So is it only a matter of time before the very concept of a DVD rental store becomes obsolete? ‘Industry projections are that digital businesses will account for 10% – 15% of consumer spending on filmed home entertainment by 2015. Therefore the majority of consumer spending will still be on physical discs for the foreseeable future’, claims Brian, so for all the clamour and excitement surrounding Netflix it appears that the traditional model is alive and well, for the time being at least. Paul, however, is less sanguine than his Xtra-vision counterpart, ‘I am swimming against the tide. It’s not going to be forever but I have to be optimistic’, he states.

 

Realising that movie rentals alone were not enough to safeguard the future of his store Paul has moved to diversify the Moviedrome experience.  A matrix themed internet café is one of the first things which greets you upon arrival in his store and a dizzying array of confectionary delights rival anything found on the shelves of his competitors. A rather luxurious cubby hole devoted to all things gaming is perhaps the coup dé grace though and the various consoles and 40 inch TV screens are rarely left unattended by Moviedrome’s loyal customers. The decision to offer internet, printing and gaming service has, Paul admits, kept him in business, ‘If it wasn’t for the internet and printing I wouldn’t be here, in the past films accounted for 80% of my revenue and the internet 20%, now it’s more like 50/50’. His ultimate ambition, Paul admits, is to make Moviedrome a kind of Kinko’s for Ireland, a place where your every whim is catered for and somewhere which just happens to offer a wide selection of movies into the bargain.

 

So what does the future hold for Xtra-vision, Moviedrome and the video rental store? Is this the beginning of the end for them as we know it or is it just a matter of diversifying to compete with their new adversaries? Xtra-vision’s mail service has provided a taste of what’s to come for the company, ‘It offers real convenience for those who don’t live near a store, or are too busy to make the trip to a store to rent and return’, says Brian.

 

Further plans to expand this model and offer a streaming/download service are in the pipeline and may yet rival the likes of Netflix. But what of Paul and Moviedrome? With his limited resources he can only dream of offering a home mail service so what are his hopes for the future. When he opened the store, back in February of 1996 using his own video collection as the stock, Paul never envisaged it would have such longevity, ‘I said I’d give myself a couple of years behind the counter and that would be it.’ But it didn’t quite work out like that. From starting out as a video rental only store Paul has gradually built Moviedrome into much more than just an ordinary movie shop. But at the end of the day Paul is just like you or I, and away from his movie store and his love of his films his ambitions are simple, ‘Fifteen years ago I wanted a Moviedrome on every street corner. Now all I want is to pay my bills, be able to go home and put food on the table, go on a holiday, whatever. I don’t want to take over the world anymore’.

Simon Bourke

 

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