TORONTO – It looks like the video store is one step closer to extinction.
Rogers is now in the process of closing about 40 per cent of its video shops as it continues to transition away from renting and selling DVDs, Blu-rays and video games.
By the end of January, the company will have finalized the closure of 63 video outlets across the country, leaving behind just 93, a Rogers spokeswoman said.
“It’s a declining marketplace, all we’re doing is meeting market need,” Sian Doyle, Rogers’s vice president of retail, said in an interview.
As far back as 2005, Rogers has been signalling that its video business was on the decline. In its most recent report to investors in October, Rogers said its video revenues for the first nine months of the year totalled just $60 million, down 46 per cent from 2010’s $111 million. Rogers said revenues were down due to reduced video rentals and sales, and because it had about 20 per cent fewer stores in operation compared to the start of 2010. The video division lost $16 million through the end of this September, compared to $13 million in the same time frame last year.
Rogers’ move to further reduce its network of video stores comes a few months after Blockbuster Canada decided to close up shop across the country, shuttering more than 400 stores.
But Doyle said even Blockbuster’s disappearance hasn’t done much to bolster its business.
“Interestingly, not as much as what we thought,” she said.
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“When Blockbuster closed we were expecting the market to be very different … but what the customer said was, ‘You know what? I’m not going to drive another five kilometres (to the nearest video store). I’m going to PVR, watch video on demand.’
“The market didn’t grow as some would’ve thought.”
Consumers have more access to content then ever before, Doyle noted, including PVRs crammed with hours of shows to watch, loads of online options to stream content, and video on demand channels that handle seamless rentals.
“Content is really, really accessible now so you don’t have to have that physical place,” she said.
“I don’t think it’s what we’re doing as much as that customers are finding how easy it is to find it in a different way.”
Rogers’ strategy makes sense, even if some video stores have at least a few years of viability left before digital fully takes over the market, said Brahm Eiley of The Convergence Consulting Group.
“Rogers’ approach – shutting these stores, which they’ve been doing for years – is far sighted. Rogers Video is not a critical part of their business, it has not been a critical part of their business probably forever – or at least for a very, very long time,” Eiley said.
“It’s the right move, especially since they already have an online (video business in Rogersondemand.com) and there really isn’t a great advantage for them to stay in (retail).”
But he still thinks video stores will survive for some time, especially when it comes to the smaller independents. While there have been numerous stories about long-standing indie stores shutting down, there are plenty of others that are doing just fine, he said.
“For every independent that’s hurting and closing down the store there’s another that’s doing OK,” Eiley said.
“For a lot of these guys they have a good business going, so unless the DVD goes away they’re not going out of business.
“But will those stores continue to decline? Yeah. And will the video store be around in 10 years? No. But it’s going to be a long, slow decline.”
Quebecor still has a large chain of more than 200 video stores under the Le SuperClub Vidéotron brand in Quebec, New Brunswick and Ontario, and the Jumbo Video name in New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario and Prince Edward Island.
While Rogers is slowly walking away from its video stores, it’s not getting out of retail. It will still have about 1,000 stores at the end of January – including the existing video shops – and is working on a new chain-wide revamp that puts expensive smartphones and tablets front and centre.
There are two concept stores in Toronto and one about 100 kilometres north in Barrie already being tested and tweaked. Doyle oversaw the bold redesign, which includes a sharp red-and-grey palette and stylish furniture so customers can relax in store.
A greeter welcomes customers when they enter and arranges assistance if needed. There are walls of digital devices for customers to browse and all the available smartphones and tablets are plugged in and ready to demo.
Staff will even offer customers a coffee or tea while they’re browsing or waiting for service.
“It’s a story not about closing, it’s about transformation and evolving for us,” Doyle said.
“It was very much about getting the (business) that we had to a place where we reflect where our future state is to be.”
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