Can anyone remember back in the day when there used to be a video rental store on just about every corner? We’d all head down to the rental store on a Friday with hopes that the latest release would be still in stock. We’d browse the aisles, pick out our one or two movies, perhaps grab some popcorn and then check the movies out for two nights. This of course meant that there was a mad dash back to the store on Sunday night in order to make sure that we didn’t get charged a late fee for keeping the movies out too long. Too bad DVDs and streaming services killed the product development definition for all of those video rental stores. Or did they?
Say Hello To Your Friendly Local Video Rental Store
So here’s the amazing thing: video rental stores do still exist! In the U.S. there are roughly about 100 of them. If you are looking for them, you’ll tend to find them that have a strong local food scene. It turns out that these stores fill a real consumer need. More often than not, video rental stores will offer a variety of films that movie lovers won’t be able to find anywhere else.
It didn’t always use to be this way – what changed? Originally video stores were the place where customers could go to rent video tapes. You remember those don’t you? They were rectangle black chunks of plastic and film that were about the size of a small hardcover book. These video rental stores did a booming business until DVDs arrived. When that happened although the video rental stores switched over to offering their customers DVDs to rent, it turned out that DVDs were smaller and weighed so much less than a video tape. This meant that they could easily and inexpensively be sent via the mail. Over at Netflix they quickly discovered that they could create a business in which all they did was send DVDs through the mail to their customers. Overnight this pretty much killed the video rental stores.
As though the arrival of DVDs was not enough to put an end to video rental stores, the march of time added some additional nails in their coffin. The first of these was the arrival of the Redbox automated rental service. Redbox is a physical DVD distribution machine that is often placed in high traffic locations such as a 7-Eleven or a grocery store. It is stocked with the top 20 most desired DVDs and offers low cost short term rentals. No store or employees are required. Just to finish things off, the arrival of movie streaming services from Netflix, Hulu and Amazon means that even the days of Redbox may be limited.
How Product Managers Keep Their Video Rental Stores Open
So what’s a video store product manager to do? It sure seems like the world is stacked against them. The answer to this question is yes – if they make the mistake and try to compete head-to-head with the Nexflix’s of the world. Instead, what the local video rental stores product managers have to do is to take a step back, study the other movie rental alternatives that their customers have, and then create something that is different. Get this right and you’ll have something to add to your product manager resume.
Different can take on a lot of different forms. One of the advantages that a video rental store has is that a movie that a customer knows that they want to watch may only be available on one given streaming service – and perhaps the customer does not have a subscription to that service. Additionally, movies are not always available on streaming services – they often get removed. Customers can choose to subscribe to 9 different streaming services or just visit one video rental store.
Video rental stores are thriving because they offer films that people can’t get anywhere else. This includes a large collection of Japanese anime. Many of these stores have also co-located with coffee shops in order to provide their customers with more than one reason to visit them. The video store product managers understand that a video store can provide things that no online service can. One of these is the ability to browse aisles of videos looking for an obscure title that you might not know exists. Just try and do that online!
What All Of This Means For You
Once upon a time, video rental stores seemed to rule the world. They were located on every street corner and we all used them. Then the world changed. DVDs and streaming video showed up and most of the video rental stores ended up closing and going out of business. However, not all of them. Some have still survived. Finding out how to keep a video rental store in business is part of the product manager job description for their product managers.
Roughly100 video rental stores still exist in the U.S. The reason that so many of them went out of business is due to a unique sequence of events. Video rental stores rented VHS (and Beta) videos that were relatively large and heavy. When DVDs arrived on the scene, they could be shipped to customers via the mail for a low cost. This allowed companies like Netflix to quickly take over the video rental market. Redbox has installed its DVD rental machines in high traffic locations in order to capture spur-of-the-moment purchases. The arrival of video streaming services would seem to have spelled the end for any video rental store. However, they still survive. The video rental store product managers have found ways to distinguish their stores from the alternatives. They’ve co-located them with coffee shops so that people have multiple reasons to visit them. They have an extensive catalog of movies that are not available on the streaming services. Finally, customers can browse the aisles of video rental stores – something that they can’t do online.
The trick for video rental store product managers going forward will be to find ways to capture new customers. They currently have the ones who remember the value of the old video rental stores, now they’ll have to find ways to capture a new generation of customers. If they continue to offer unique ways to get and watch movies, then video rental stores should be here for quite some time.
Question For You: If you were a video rental store product manager, what additional services could you add to your store in order to attract more customers?
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What We’ll Be Talking About Next Time
Doesn’t it seem as though the Starbucks coffee shops are just about everywhere by now? There are even some streets that have two of them: one on either side of the street so that people don’t have to flip around to get to a Starbucks. The market for coffee has become so large and so well served that the Starbucks product managers have a real problem on their hands. How are they going to change their product development definition to keep growing the business if they are already everywhere and serving everyone? It turns out that they think that they have the answer: go upscale.