Very few people know this, but for about six weeks, in late 2006, I was employed at a Berkeley video store, located in the Elmwood neighborhood. My consulting practice, at the time, was very new, and I wanted to pick up an extra thousand bucks a month, just to pay the bills.
The reason I only worked there for about six weeks was that the assistant manager, Robin, made a scheduling error, and put me down for an opening shift on a Saturday morning, when I was actually scheduled to arrive at one. I arrived a few minutes late, at 1:10, and was promptly “fired” on the spot, much to my surprise. I was also told to never come back, or rent movies there again.
I called the store owner a couple of days later and informed him of his mistake; he said “You can have your job back, if you want it.” Miffed by the way he treated me, I said, “No thanks.” 10 weeks later I was working at LaunchSquad, and running a full roster of clients, for social customer strategy.
The video store closed a few weeks ago; I noticed it while riding my bike down College Avenue. A really non-compassionate part of me was (embarrassingly) happy that the store was no longer in business, but after thinking about it for about ten seconds, I was upset that this guy’s livelihood (and his customers main Friday-night hangout) was gone. The Elmwood neighborhood is much poorer for it.
The reason for their going out of business was totally simple: disintermediation. In the last five years, the video business has been decimated by Netflix, YouTube and Apple. After taking over Walmart’s video business in 2005, Netflix launched their streaming-video option, which has been functional for two years, and costs as much as two in-store video rentals. YouTube is now serving full-length movies at no cost. Blockbuster has been barely holding on since 2009, trying to stay a step ahead of their creditors.
Although I forecasted all of this back in 2005 and 2006, in the early days of my first music and social media blog, Megalomania, it’s really depressing to watch it happen. Some of my fondest memories from childhood were hanging out at Tower Records in Mountain View, browsing through the cassette department. You could find me there every other Friday afternoon, in the sixth grade, cashing out my paycheck from my paper route.
The real reason the video store went under was that their core value proposition, providing great, well-chosen movies to the residents of the Elmwood neighborhood, was simply being done better, for a lower price. Here’s the part where social customer management genius Paul Greenberg is really going to flip out. I don’t think the whole ““experience trumps utility”:http://the56group.typepad.com/pgreenblog/the_big_picture_philosophy_the_universe/ “ argument really holds up here. People stopped going to the video store, even though the video store had $1 popcorn and Ben and Jerry’s ice cream, simply because there were more movies on the Internet, and the movies were in better condition (no scratched DVDs, films were always in stock).
Even though there were some cool “experiences” to be had at the neighborhood video store, experience cannot trump utility when price makes it so unreasonable that folks have to pay for just the experience, with no take-aways. I’m guessing that the independent video stores in the area (the once-famous Reel and a few others) will be hanging in there for the short-term future, but the next few quarters will be really rough. [Just found a note on a Mog.com blog from one year ago that Amoeba records is holding onto hundreds of thousands of used CDs in an Oakland storage space.] I hope they can hold on, because I’m still a customer, and nothing beats cooling off at Amoeba on a warm Saturday afternoon.