Every technological change in film distribution calls for an evolutionary step in how we get films to audiences.  Broadcast television, VCR, Cable, DVD, VoD, DVR, and now internet streaming: what do these changes point to in relationship to our audience?  Simple: audiences want the power to choose how, when, and where they engage content.
From The Buffalo News:

Home movie future fuzzy
By Stephen T. Watson
Updated: October 28, 2009

On a recent episode of HBO’s “Real Time With Bill Maher,” the host offered a “New Rule” for home entertainment.

“Blockbuster cannot announce it’s closing 960 stores. Where will I go to rent a movie in 1988? And how do they still have 960 stores?” Maher quipped, to laughter from the audience.

It’s been a hard fall for Blockbuster — from world-beater to butt of late-night jokes — but this is a sign of the state of flux that the home-entertainment industry finds itself in today.

Competition from Netflix, the online rental powerhouse, and Redbox DVD-rental kiosks — not to mention the channels available on digital cable — has walloped Blockbuster.

“Blockbuster is like the Spanish Armada. It’s out there, and the wind isn’t blowing, and everybody is taking shots at them,” said Jim Bove, owner of 88 Video, one of Buffalo’s last independent movie-rental stores. “They’re trying to do everything because they’re trying to survive.”

But technology-driven changes are roiling the entire industry, from the studios to 88 Video and everyone who rents movies.

Video on demand threatens the supremacy of DVDs and high-definition Blu-ray discs, as people stream or download movies and TV shows to watch on computers, smart phones or TVs.

Like music and books, videos increasingly are being digitized, and everyone from international corporations to consumers is trying to figure out what it means for the future.

“By, say, 2015, you could have more movie titles on your iPhone than an entire Blockbuster store could hold,” said Phil Leigh, an industry analyst and president of Inside Digital Media in Tampa, Fla.

The VCR launched the home-entertainment revolution, giving the public the chance to conveniently watch anything from family-friendly Walt Disney flicks to adult films.

Ron Alsheimer started offering rental movies in 1984 from his TV Factory store in North Buffalo. His renamed Video Factory chain eventually grew to 35 area locations. He sold out to Blockbuster in 1996 and briefly opened several DVD Dot stores before closing in 2006.

“The video business has been attacked from so many different angles,” said Alsheimer, president of the Plaza Group.

Netflix lets people rent DVDs and Blu-ray discs online — without having to go to a store, without being limited by the store’s inventory and without having to pay late fees.

The company, which began shipping DVDs in 1998, had 10.5 million members as of June and ships 2.2 million discs per day. “Netflix has really changed the way people watch movies,” spokesman Steve Swasey said.

And companies such as Redbox are setting up DVD-rental kiosks at supermarkets and other high-traffic locations, where DVDs rent for $1 per day for as long as you want the movie.

There’s more pressure on the DVD-rental market, though, from the numerous movie channels on basic cable, premium cable and pay-per-view and the digital video recorders that allow for time-shifted viewing.

But it’s video on demand — on cable and over the Internet — that is creating a sea change. Viewers can stream videos free on Hulu and other sites, or rent or buy them through Amazon, Netflix, Blockbuster or Apple’s iTunes. They can watch the digitized movies on their computers, their smart phones or — with a little technological know-how — their TVs.

“I think the DVD has already entered into a long period of decline,” Leigh said. “It will be replaced by digital online downloads.”

The movie studios, the rental chains and online distributors are wondering what this means for their bottom line.

Blockbuster is responding by announcing it will close up to 960 of its 3,750 stores while adding kiosks and retail-only stores and beefing up online rentals and video on demand.

Blockbuster and Netflix — which also is pushing into video on demand — do see DVD rentals growing in the near future.

“The packaged media is still going to be how many consumers get their entertainment,” said Randy Hargrove, a spokesman for Blockbuster, which has 29 stores in Western New York.

Area movie-philes will remember Mondo Video fondly.

The home to obscure and overlooked movies closed in 2007, shortly after owner Michael Faust moved the store to Main Street to be closer to University at Buffalo students.

“They don’t really watch movies any more. They certainly don’t rent movies. They watch clips of movies on YouTube,” said Faust, who sells DVDs and VHS tapes online on eBay, Amazon and his Web site, www.mondovideobasement.com.

Faust and others say they are not ready to write the obituary of the DVD, in part because some people are just more comfortable with this technology.

Ellen Humphries, 33, of Guelph, Ont., a registered nurse who was at Walden Galleria last week, said she goes to Blockbuster once or twice a week to rent DVDs and she never watches video on demand ” ’cause I don’t know how to do that, and Blockbuster’s right around the corner.”

Family Video, for example, is expanding into Buffalo — where it has nine stores — and other markets, and the company said its same-store revenue is up from last year to this year.

“People get excited about technology, and rightly so. But what they forget is people get set in their ways,” said Todd Bezenah, Family Video’s regional director in New York State.

Still, many people are comfortable with the digitization of movies and TV shows, and they like the format’s convenience.

“I love the free Kids on Demand [channel from Time Warner Cable]. You can get PBS shows,” said Jen Mazurkiewicz, 31, an admissions worker at Daemen College and has a son, Benjamin, 3. “He watches “Little Einstein’ [and] “Caillou.’ It’s this bald Canadian kid who whines a lot and drives my husband crazy.”

It’s the same digital revolution that is happening with music and books, as CDs are giving way to MP3 files and books are — slowly — giving way to Kindle-ready e-books.

“We’re getting away from the packaging that information, or whatever it is, comes in, and we’re focusing on the content itself,” said Jim Milles, a tech-savvy UB law professor. “I can’t remember the last time I bought a CD. I don’t buy print books anymore unless I have to.”

Bove has seen the evolution in movie watching since 1987, when he opened 88 Video.

Inside, VHS tapes line the wall behind the front counter, and each case holds a hand-written note card of rental dates and customer names.

The Seneca Street store has newer releases on DVDs, and those make up the bulk of its business today. Some people still call seeking hard-to-find movies on VHS, but Bove wonders how long he will stay open.

“I own the building, so I don’t have to pay anybody rent,” he said. “I’m just kind of hanging in. I’ve had some of my customers for a long time. Sometimes I think I’m the neighborhood bartender.”