Rogers Video has hit the eject button, ending all of its DVD and game rental service in Canada, as the bottom falls out of the market for DVDs.
And as a SFU professor says, this is just the beginning. All things that can be distributed or ordered by data, eventually will be, says SFU Communications Professor Richard Smith.
“From Rogers’ point of view, why have a store?” Smith asked, adding there are costs and vulnerabilities to “moving physical objects around.”
The shutdown of all 90 remaining Rogers Video stores, including two in Surrey, comes on the heels of the closure of 400 Blockbuster stores last year. It leaves Canadians without a national movie rental chain.
Closely watching the withering movie rental business since 2005, Rogers has been actively reviewing its exit strategy since 2009.
“We had talked about this before, and what we’re finding is that customers’ needs are changing and there’s more of a demand for content any time, any place, on a variety of devices,” Leigh-Ann Popek, senior manager of public affairs for Rogers told The Leader in an interview Wednesday.
“So we’re seeing a growth in the Rogers on Demand Anyplace TV, and we’ve recently launched Nextbox, which is the whole home entertainment system.”
The existing stores will be repurposed into display outlets for the company’s cellular service and phone hardware, as well as its cable offerings and landline services.
Video rental stores have taken a hammering from lower-cost movie kiosks and Netflix, a monthly service with unlimited video.
Video revenues for Rogers were cut almost in half last year to $82 million, less than one per cent of the company’s annual $12.4 billion revenues.
The stores are now liquidating stock on a two-for-one offering.
Popek said the company doesn’t expect any layoffs because of the move.
“We hope that all of our employees will stay with us and continue working with us,” Popek said, adding the company plans to open 30 more stores that will showcase home services and wireless products in Canada this year.
SFU’s Smith said the video industry is victim to a truism of this century: Anything that can be changed to data, will be.
Some time ago, he said, videos went from VHS to DVDs, changing them into a digital format, which now can be distributed easily over an Internet connection.
Canadians, who have the highest percentage of adoption of Netflix (10 per cent of our population with accounts), are especially amenable to receiving their video services online.
Smith sees no end in sight in the global shift from atoms to bits of data.
“Books, newspapers are all in this process,” Smith said. “Anything that can be reduced to bits, can and will be.”
The shoes we wear will always remain a physical entity, but the way we buy them is already changing.
“They do everything except the distribution part, and then they just ship it right to your door,” Smith said. “You can have no store at all, or you can have a small store where people can just pick stuff up.”
Smith has no fear the quantum shift to digital will suffer the same experience as the dot-com bubble that occurred between 1995 and 2000.
“A lot of the dot com was based on wild speculation about what might happen,” Smith said. “I think people are mostly over that. Now you’ve got a more measured approach and doing things that actually do work.”
