Monday, April 21, 2008

Ratings

According to dvd-rental-review.com here are the top ten online dvd stores:

1. Netflix
2. Blockbuster Online
3. DVD Avenue
4. Gameznflix
5. cafedvd.com
6. eHit.com
7. PeerFlix
8. Number Slate
9. iLetYou
10. Intelliflix

The ratings are based on many factors such as inventory, membership features, movie information, search capabilities, and support. This site praises online dvd sites mostly for their wide range selection and ability to search just about anything. They say that membership features are important because customizing your account also makes it easier to find what you are looking for (dvd-rental-review.toptenreviews.com, 2008). One of the biggest challenges that physical rental stores will definitely face is the amount of access customers have to a variety of film genres. For instance, most of these online dvd rental stores allow you to search with just about any little bit of information you have to find the movie 
you've been looking for.

This site is just one of many that rate online rental stores. Netflix and Blockbuster are the top two based on most consensuses. 

Do parental controls factor into online video stores?

I have a Netflix account. Just now doing research on the site I found that within my account I can set up separate profiles for other individuals who I want to add to my account. This feature allows parents who set up accounts to give access to their children under their specific profile. Parents (or the owner of the account) can decide what material can be viewed by other profiles. This is all based on the current rating system developed by the Motion Picture Association in 1968. According to the site, the MPA delegates a board of 10-13 members who serve for various lengths. The board receives films from producers who pay fees to allow their films to be rated. The board members then act as representatives of the average American parent, and rate the films with either a G, PG, PG-13, R, or NC-17 rating. The site prides itself on high levels of integrity that go into rating a movie accurately and choosing the best people to make these kinds of decisions. A producer can appeal the rating, and a long process ensues to find out if the rating can be changed. The MPA site says that it takes regular polls to find out the satisfaction level of American parents around the country and most parents find the ratings "helpful." (mpaa.org, 2008) I also noticed that when you click on a particular movie's ratings on the Netflix site, you can get a very detailed description on what the ratings mean. For instance, the site has a section called "Note to Parents." Under that heading there is "Common sense note" which describes very particular scenes in the movie that are not suitable for children. As well, there is a legend for violence, sexual content, language, social behavior, drug use, and commercialism which have even further details. This section, specified for any money a person is thinking about renting, seems extremely helpful in determining what kind of inappropriate material might be shown.

Unlike Netflix though, the Blockbuster website does not contain these specific explanations for material within the films. The site does contain rating labels, but a user cannot click the label to get further detail. DVDavenue.com and Intelliflix.com are two other online DVD/video stores that do not have these specific ratings. 

On the one hand, Netflix really tailors it for parents so that if children want their rent videos, they can easily do so with parents' permission and monitoring. But, if a child is for some reason given a credit or debit card before the age of 17, he or she could easily set up an account and access explicit material without their parents knowing. Similarly, though, video stores make it possible for young teens to rent movies that aren't age appropriate. The one difference and often better alternative though with the physical stores is the face value factor. For instance, Blockbuster requires the customer to present a form of identification to verify that he or she is on the account. The sales associate can look at the ID and decide if the person is of age to being renting the material. Behind a computer screen, there are many ways to cheat the system and lie without the company knowing.  

But the real issue has surface with the advancements in parental control technologies. Because of the rise in explicit material, especially on television, it seems that American parents have demanded more controls. With movies, the acceptable amount of violence, sex, and language seems to have risen as well, and some parents don't agree with the new standards. But with these new technologies there are some concerns. The most alarming concern is the fact that a good majority of parents don't seem to be involved in the monitoring children's viewing. According to Julie Simon, vice president of Time Warner cable in an article in Broadcast & Cable, there is a lot of new communication technologies out there to help parents monitor their children's television and movie viewing, but educating the parents in how to use these technologies is difficult. Cox community relations director also said that getting parents involved in monitoring is actually the first step in solving all sorts of problems that go further than just television and videos. Cox has partnered with the National Center for Missing and Exploited Children to put PSAs on Netsmartz.org. These PSAs are being developed to help inform parents and get them involved in their children's media consumption. 

The issue of parental controls and online video stores versus physical video stores seems concerning, but equally as good or not good in determining where parents have the most control. Physical stores give parents comfort because of the face-to-face factor and the identification process. Most of the time, children are under their parents' accounts. The online stores (well some like Netflix) allow parents to do a lot of research on the movies and set up restricted accounts for children. It seems that both entities are creating systems of protection, but perhaps video online stores are even more appealing because they didn't forget to think about protection!

Is Blockbuster perhaps the real answer?


According to the Entertainment Merchants Association, each month, approximately 28 million households purchase a DVD, and 27 million rent one to the tune of about $23 billion in sales. That's nearly three times what we spend at traditional movie box offices. (Lewis, 2008) With the introduction of online video delivery, viewers of movie DVD's athome have yet another option to choose from when deciding on a movie rental. Stores that rent DVD's like Blockbuster and Hollywood video are forced to reach new segments of the population by expanding their current business plans. The main advantage of online video delivery, mentioned in the previous blog, is the ease of which the movies arrive and are available; a constant struggle for the minimal inventory that can be accounted for by physical video rental stores. Although sales are dropping for the physical stores, there are several steps that they can and are taking to stay competitive with the online stores toremain in business. 

For a video rental store to have maximum profits there must be a trade-off between lost revenue from customers regarding the impact from lack of stock on-hand and the additional cost of having more stock and holding cost increase (Lehmann & Weinberg, 2000). This trade off is likely to result in demand not being constantly met in order to earn profits after demand decreases for the specific movie. Netflix, which has 15,000 titles in its library, has enjoyed stunning success, surpassing 1 million subscribers in 2003. At the same time, offline retailer Blockbuster is struggling to turn around in the face of declining movie rentals. (Aaron, n.d.) Now to combat this reoccurring problem and battle the online rental sites that have emerged, physical video rental stores are creating online stores as well. Blockbuster for one, has created an online rental capability to unite those who desire the experience of picking a movie for a night and those who regularly rent movies. At Blockbuster.com (2008) one can now request a movie  to be delivered in 1-2 business days just like other Netflix.com ty
pe sites. (Blockbuster.com, 2008) After viewing the chosen or delivered movie, an advantage to having both physical and online stores is the ability to make movie returns at the store easier than mailing in the video. 
There is a portion of movie-viewing population who would rather go to a video store for the experience of an evening in rather than order a movie online. These two main differences target dissimilar segments of those who rent movies. The physical stores are targeting impulse renters more than ever because the lack of immediate delivery with online renting is clear. Physical stores luke Blockbuster are using this to their advantage and dismissing the previous stigma of overdue fees to compete with the online stores like Netflix that allow you to keep the movie for an unlimited amount of time, or until you want to rent a new movie at no extra charge. (Netflix.com, 2997) Blockbuster's online rental site now offers a Total Access Pass, which combines the physical store qualities as well as online selecion for only $19.99 a month. Netflix (1997) also offers 3 DVD rentals at a time per month for &19.99, but the advantage with Blockbuster is that one can exchange in-store or online. (Netflix.com, 1997); (Blockbuster.com, 2008) Physical stores also have the ability to be service experts over online stores. Employees can help customers choose the perfect movie for the night in as well as solving problems face to face rather than in the jumble of online or telephone service confusing. Another variable in rental stores is pricing; a wholesale price of $60 or more to video stores and a sell-through price of $20 of less for sell in the physical store. Originally the movies were targeted for children segments; however, now there are more adult movies for sale in the video rental stores. (Lehmann & Weinberg, 2000) By selling movies in the store itself, the video rental store can be seen as a convenient place to purchase a favorite movie or new release instead of just renting it.

Segmentation in business strategies is creating new markets for the online and physical movie rental stores. One, the physical store has to adapt to the changing determinant of video rental choice which is availability; the other, an online rental site, has to retain and create customer loyalty through other ways than subscription. Online sites like Netflix.com realized that customers had to wait for their DVDs. They preferred the slower pace over the hassle of choosing, renting, and returning videos from conventional retailers. Thus was born Netflix's innovative subscription service, which allowed customers to keep videos for as long as they wished. (Netflix.com, 1997) Blockbuster and other physical stores have expanded their services to reach out to the new digitally competent population. Based on their adaptation and loyal existing customer base, they are succeeding in becoming competition to the rapidly growing online movie and rental sites. 

Monday, April 14, 2008

It seems that purchasing films via the internet is inevitably more appealing



With the advent of online DVD rental services like Netflix and now even Blockbuster, the threat of the internet takeover of video stores, particularly local video stores, is rising. Online rental stores are nothing new and the threat of online buying has been present for several years.

What online rental stores offer is first off, convenience and secondly, there are no late rental fees. A customer pays a monthly
 subscription, based on how often he or she watches movies, and doesn't have to worry about the hassle of getting the video of DVD in on time. Like the music industry, the internet is transforming DVD shopping. As well, the choices--documentaries, exercise videos, foreign films, indie films--just about anything you want you can get. This solves problems like storage space. You go to a local Blockbuster store and find that almost all of the original Nightmare on Elm Street videos or DVDs, if they've made them) are not in stock. With online st
ores, access to just about any film is possible (Lewis, 2008). 

To make matters worse, there are definite disadvantages to local video and DVD stores besides the fact that you have to physically go there, with other people looking around also, and find a DVD that could possibly be out of stock. The fact is film preservation is difficult. According to Straubhaar and LaRose, the nitrate film stock was in use until the early 1950s is chemically unstable. Most of the film from the silent era has been lost because the film begins to get sticky and eventually turns to dust. Even in present day, colors begin to fade and saving them to a digital storage media is costly. How many times have you gotten a Blockbuster DVD and it's scratched halfway through the climax?
 Although this same problem can happen with films purchased online (they do go through the mail), the detail to this kind of problem is probably much more focused on because of the amount of turn-a-round that happens each day. 

Some business owners are worried about what online stores could do to their own businesses. Two local video storeowners in Boston, Michael Solan and Barry Bradley, who own Video Americain, realize the pressures of the internet. But they also take into account that the legal way of purchasing videos online is just one problem they are facing. Downloading films illegally is another giant hurting the industry. Programs like BitTorrent are probably more threatening because they violate MPAA regulations, and yet thousands of people are getting away with it.

The truth is, with the advent of the DVD most videotapes have been replaced. The same goes with the DVD players and the videotape players. As we continue towards a completely digital and electronic era, it is likely that most purchasing will be done online. Like iTunes and its cheap $1 songs, online film stores are an easy, affordable, and legal way to purchase films. Companies like Netflix will be the forerunners in pushing this type of buying. Although some people, concerned about changing their ways and adapting to this digital era, will continue to help make profit for local video stores, the reality is that Netflix is definitely not the first of last company that will take on this billion dollar market of online rental customers.