What A Video Rental Store Can Teach Product Managers

What A Video Rental Store Can Teach Product Managers

Not to date myself or anything, but can anyone else remember going to the video store on a Friday or Saturday night? I’d wander the aisles and take a look at every movie on the “just released” rack in order to decide which one or two videos I was going to rent. Netflix and the Internet have pretty much killed the video store these days and so    Séries Netflix    what’s a video store product manager to do?

(Streaming) Video Killed The Video Store

To be a video store product manager in the 1990s was the bomb! Everyone finally had a VCR in their house and the movie studios were cranking out movies, both new and old, on video tape left and right. Your only real problem was trying to get your stock level right so that you could meet the needs of most of your customers.

Almost overnight everything changed. Those darn DVDs came along. Sure, you could start to replace the tapes in your stores with DVDs, but all of a sudden the product managers over at Netflix discovered that you could cheaply use the U.S. postal mail to send DVDs to people’s homes. Oh, oh – now your store was under threat. There was nothing on anyone’s product manager job description that told how to handle this situation.

As though things couldn’t get even worse, they did. Since so many consumers now had high-speed internet service to their house, the Netflix product managers moved on to the next stage of their game: offering streaming video and making it so you didn’t even have to wait by your mailbox anymore.

Given all of these superior ways to get your hands on the latest and greatest videos, why would anyone still make the trek to the store and run the risk of incurring late fees? There are some people for whom a weekend video is still a spur-of-the-moment purchase. These last remaining people were vacuumed up when the product managers from Redbox placed their self-service DVD rental kiosks outside of 7-11′s and other stores. That’s it, game over for the video stores.

How Video Stores Are Being Reborn

But wait, all of the stores have not gone away. Sure, sure – the big chain ones like Blockbuster and Hollywood Video have been closing their doors left and right. However, a number of the independent video stores are still open for business. What have their product managers been doing?

A number of the stores have changed the products that they offer to their customers. Some have started to offer events. Nicole LaPorte from the New York Times reports that these have included a film studies program, classes on anime mythology, lectures by filmmakers and spoken word events. Clearly, this isn’t your father’s Blockbuster store.

What you’re starting to see is that place that we used to go to rent video tapes is transforming itself into more of a community gathering place or a cultural hub for people who really like films. The store product managers are positioning their products to be different than Netflix which clearly has no soul: it is both nameless (who is sending me those videos?) and faceless (exactly where is Netflix located?).

Video Store 2.0

All of this “connect with your customers” strategic management stuff is good short-term product manager positioning. However, what should video store product managers be doing in order to prepare for the long-term?

Dr. Peter Fader is a very smart marketing professor at the University of Pennsylvania who thinks that he knows the answer. Here’s the most important point that he makes: as easy as it would be to do, video stores that want to survive must not consider Netflix as an adversary. Netflix is just too easy to use and if you position them as the enemy, then you’ll force your customers to choose and in the long run the video store will lose.



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