As an employee of Movie Gallery Inc. via Hollywood Video, I knew about their decision to file Chapter 11 Bankruptcy before the general public. This information is now public knowledge. I see the cause of their financial troubles as a direct result of trying to compete with the "long tail" of movie rentals. They have tried to implement a subscription based discount program, which is simply costing them much more money than they are making. With the expenses of rent/leases, physical movies and selves, and other overhead, they simply cannot compete with the web based companies, such as Netflix. This is the second time that Movie Gallery Inc. has filed Chapter 11 in the past 2 1/2 or 3 years. They filed in Oct. 2007. So, do you guys think this is the beginning of the end for the traditional movie rental store? I'm afraid it might be, but I hope not. I need the pay check...
These are some articles and press releases about the filings:
http://www.kccllc.net/moviegalleryhttp://www.moviegallery.com/pages-q10151-Restructure.aspx
2 comments:
I personally believe this is the beginning of the end. Blockbuster in Florence recently closed their doors. It is almost impossible for "Mom and Pop" movie stores or even Blockbuster or Movie Gallery to compete. Netflix offers that the movie comes straight to your mailbox, for one low price, and you have a much wider selection than if one went to the video store.
I also meant to mention the fact of piracy. Piracy mixed with Netflix (or whatever online renting someone uses) spells nothing but disaster for the video store industry.
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