Video Stores Squeezed Out by Netflix, Redbox

Will brick-and-mortar DVD locations soon be gone for good?

April 05, 2010

SALT LAKE CITY - Netflix, Redbox and movies-on-demand are chipping away at brick-and-mortar DVD stores, the Salt Lake Tribune reports. With all the new ways to get movies, the video store is becoming a dinosaur.

With Netflix sending movies directly to the consumer and Redbox kiosks inside convenience stores and McDonald??s, as well as grocery stores and big-box retailers, major video-store businesses are going out of business. For example, Hollywood Video recently announced it would shutter more than 800 U.S. locations. Blockbuster also will be closing 500 of its more than 3,500 U.S. stores.

A 2009 study by NPD Group discovered that such brick-and-mortar units captured 45 percent of the DVD rental market, with subscription services such as Netflix grabbing 36 percent and Redbox and other kiosk rental services accounting for 19 percent.

Blockbuster is fighting back with 3,000 "Blockbuster Express" kiosks already in place with plans to put in 7,000 in 2010. The company also has a streaming on-demand and subscription movie service.

But some people still feel there??s an audience for the video store. "If I were to look at a list of Redbox titles, I probably would be surprised if we had 10 of the titles they have listed," said Tori Baker, director of the Salt Lake Film Society, which runs several city theaters. "We??re looking for a balance between replacing the old [VHS] collection and buying and accessing the newest in independent film."

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