It might seem absurdly inefficient to get in the car and drive to a store to rent a physical disc, then repeat the process to return it, but once upon a time, it was the only was to see the latest release movies. The neighborhood video store was part of the retail landscape in the 1990s and early 2000s, and the market leader was Blockbuster.
At its peak, Blockbuster Video had over 9,000 stores and nearly 85,000 employees. It had locations in 26 countries and was the largest source of revenue for the Hollywood Studios. It pioneered new business models in home entertainment, and diversified into games, music and electronics over its growth years. Millions of people of a certain age will remember spending Friday nights walking the aisles looking for the latest releases, and Tuesdays paying late fees.
At one point, with Blockbuster’s dominance of the video rental market seemingly unassailable, an upstart competitor in the DVD-by-mail business raised the white flag and offered themselves for sale for $50m. That deal never went ahead. That upstart, of course, was Netflix, which today has a market cap of $138 billion. Blockbuster filed for bankruptcy in 2010 and no longer exists.
Except for one location – Bend, Oregon. After years of gradual decline from its zenith in 2004, Blockbuster’s stores closed, and the brand was eventually sold to Dish Networks. The Bend store is the last remaining Blockbuster franchise. It does a brisk trade, boasting over 4,000 members and attracting visitors from around the world. Nostalgic Gen Xers visit the store to purchase Blockbuster sweatshirts, T-shirts and trucker caps, and of course rent the occasional DVD.
The fact that this store is not just surviving but thriving is an interesting study in how niche players can exist surrounded by much larger competitors. A successful niche understands and builds a deep connection with its users. Visitors to the Bend Blockbuster appreciate the novelty, service, breadth of content and staff recommendations. The same thing is happening in online video, with a new range of niche on-demand streaming services.
The home entertainment business has consolidated in recent years. It is now dominated by a handful of major brands: Netflix, Disney, Apple, Amazon, AT&T, Comcast. The breadth and depth of each content library varies but is anchored on big-budget tentpoles like The Avengers and The Morning Show. With multi-billion dollar budgets and subscriber targets in the tens of millions, they try to appeal to as wide an audience as possible, much like the Blockbuster stores of old.
This has created an opportunity for new streaming services focused on one particular genre. There’s been a proliferation of diverse, quality content in recent years, packaged into highly curated offerings. Whether you’re in to classy British dramas, anime, Bollywood movies, Korean content, faith-based, fighting sports or LBGTQ content, there is an SVOD service for you.
One of the most successful genre services is Crunchyroll. With over 2m subscribers and 45 million ad-supported users, this service gives fans of Japanese anime what they want for $7.99 per month. Superfans can watch shows as soon as one hour after they’ve aired in Japan, plus order merchandise and even attend live events. Crunchyroll clearly understands what’s important to their audience, and delivers it really well.
In the sports genre, Dazn (pronounced Da-zone) is focused on boxing and MMA content. While its European version has more football rights, the US instance is all about providing great coverage to fight fans. For hardcore fans of MMA and wrestling, there is FITE, another martial arts focused boxing service.
Korean and other Asian drama fans have choices like Viki, Asiancrush, or Kocowa. There are dozens of other websites where these shows can be downloaded or streamed, making this one of the most competitive streaming entertainment niches.
If you’re into a couple of different niches, it starts to get expensive which each service running between $7.99-$19.99 per month, and most users also subscribe to another mainstream VOD like Netflix ($12.99 per month).
The level of fragmentation in streaming entertainment will no doubt lead to some consolidation or closure, as consumers tighten their belts and the license fees for content keep increasing. But like the last Blockbuster, the niche streaming services that are laser-focused on delivering for their audiences in terms of content and service will be around for a while yet.
Picture: Wikimedia / Creative Commons License