Don’t be a Blockbuster!

I am travelling this week and marvelling at the ubiquity and ease of use of Netflix. I can watch the rest of a movie I started at home on my laptop here in Renton, Washington. I can remember the days of “be kind, please rewind” being a part of the home entertainment experience, and if I wanted to watch a movie on the road, I would either have to bring the tape with me or go to a nearby Blockbuster to rent the same movie. I never did that. It made me think about how things are changing for Blockbuster and how they are in danger of staying the same for Christian radio.

First, a little background.

The first VHS tapes were produced in the mid-1970s. Movies like M*A*S*H, Patton and Hello Dolly were sold to home viewers for $50-$75 to play on their $1600 VHS players. The last movie released to VHS in the United States was A History of Violence in 2005. While there are still VHS/DVD players/recorders being made, the last VHS-only player was produced in October of 1998.

With the cost of VHS tapes remaining fairly high throughout their existence, most people chose to rent movies instead of purchasing them. Blockbuster was the dominant video rental chain from the mid-1990s until their bankruptcy and subsequent purchase by DISH Network in 2011.

DVDs and, later, Blu-Ray discs took over. There is some discussion in the entertainment world that even DVDs are beginning to fade from dominance, and that streaming video is what will be the main delivery means for the next several years.

So, what does this mean to the Christian broadcaster?

My friend Tate Luck, now with Z88.3 in Orlando used to be the Program Director at RadioU in Columbus. He told me once that it was crucial to change the station in small ways constantly. I should be able to hear a discernible difference in the sound of my station month-to month. Are you able to say that, or are you comfortable with what you are?

I listen to a station in Louisville when I am back home that sounds much like it did when I left town in 1999. Little has changed in the air staff, the imaging or the overall thrust of the station. At one time, it was a leader in Louisville’s Christian community, but they are not anymore. A rival came in a few years ago and is more influential than my old station is. Why?

Blockbuster is the example.

Blockbuster had a business model that worked for years. They split revenue with the movie studios on new releases. So if a tape of Toy Story cost me or you $20 at Target, Blockbuster might pay a couple of bucks per copy, then split the revenue 60/40 with the studio. If they rented each tape 20 times for $3 a rental, they had cleared $34 on a $2 tape. That kind of profit and service made them a huge enterprise. At their peak in 2009, they had 60,000 employees at over 4,000 stores.

When DVDs hit the market, a couple of changes took place. First, they were much cheaper for the studios to produce. A mass-produced DVD costs about 70 cents to reproduce; the VHS, about $2.70. Second, they were smaller. Third, they would not wear out. A VHS had a few hundred playings at the most, the DVD will wear out, but not for many years. Finally, with the introduction of DVD burners on computers, they could be copied. Blockbuster continued their business model, but the dynamics had changed.

Now, movies are available by digital streaming. The cost is negligible, they can be seen just about anywhere and they will never wear out. Yet, Blockbuster has not entered into the streaming world, and probably won’t. Netflix is the “brand” there, Amazon is looking to give them a run for their money while Blockbuster just takes the old non-streaming Netflix model and adds the twist of brick-and-mortar stores where an exchange can be made with their “Total Access” package. Nothing really new, just the old slightly re-imagined.

That’s what I think Christian radio is slipping into. Comfort. Most stations know that the “Becky” model works, the “hits only” model works, the “less talk” model works. But it probably won’t in the long run.

Blockbuster was comfortable with their business model and was making money. Look back  a couple of paragraphs. Blockbuster’s peak year was two years ago. Bankruptcy followed in 18 months. I think Christian radio needs to ask some hard questions so that we can be effective and fully alive five, ten and twenty years from now.

Here are some of mine:

As a Christian, am I growing? Is my station growing closer to Christ? Should it?

What is our true calling?

Is it really all about her? Should it be?

Who is the next listener?

What can I do to attract a generation of listeners that reputedly don’t use radio?

What am I doing to win listeners on the Internet? I have several competitors in town. I have 100,000+ competitors on the ‘Net.

Am I using the social media tools at my disposal correctly? Do I use them as a person would, or as an entity would?

Am I capitalizing on the value of the airstaff?

Is the vision of the station clear? To whom?

What am I playing that doesn’t research well, but may be of benefit to our listeners?

What am I playing that does research well, but that does not fit the vision of the station?

A few years ago, former Financial Times writer Tom Foremski wrote in a blog post: “That’s what the Internet provides — the means to dramatically devalue an existing industry.”

I do not have a doomsday view of our industry. Many of the industries that Mr. Foremski writes about have never had one thing that radio always has: radio has always been perceived as free or really cheap. Perhaps this is what makes the Internet and associated technologies so disruptive: they take value out of existing technologies. With radio, most listeners already accept it as free or minimal cost, so when there is little cost perceived, there is little reason to move to another platform.

The movie industry keeps moving to distribution that is near-free. Digital projection in theatres, digital streaming and digital production. All nearly free. Blockbuster (and even Netflix) cannot compete with free or nearly so. Newspapers have lost the classified-ads battle and are struggling to stay alive. Books are becoming more digitized each year. Magazines are becoming much more computer tablet friendly.

But since radio doesn’t have the huge legacy costs of these other industries, I think we have a leg up on the others. I really think that the biggest influence of Christian radio is still to come!

I would love to hear some of the disruptive questions you have and perhaps how you are answering them.

6 thoughts on “Don’t be a Blockbuster!

  1. LOCAL LOCAL LOCAL, the one thing the internet has a hard time being. Its built in your cars still, and your iPod cant break in with election coverage or Tornado watches. And with corporations making local radio sattellite, it makes the value of a local station much higher.

  2. Terry, great article. I agree with John…being a part of our local community has been key for us. We have people who are invested in this area and involved in everyday life. Something I’ve been thinking lately is how culture has changed so much that we’re all so involved in our own things, we hardly know our neighbors anymore and tend to value our privacy. Yet we’re all going online and posting intimate details on Facebook! What that tells me is that we want interaction with others and to feel like we know them on our own terms. Our listeners get that when they tune in to our station!

  3. Terry,I like your comment from Tate Luck for a station to implement continual small changes. It is important to avoid growing stagnant and to routinely search for ways to be relevant and engaging to the audience and supporters. We can learn from Blockbuster’s mistakes.
    Great blog, Terry!

  4. People want community in everything they do. They want to know that they are not alone. Period. Connection is king. Whether it’s through Content or being Local. It’s connection. It’s a felt need being met. The average listener has 10-20 minutes to tune us in. Is everything or something they hear, going to meet a felt need they have in their life at that moment, that will bring them back again and again and again, because their need was met.

  5. Great article, Terry. I agree, we need to be engaged and entertaining every time the listener tunes in. We need to go out of our way to discover new ways to connect not only with our listeners but to connect our listeners and ourselves to our faith our community and our God…not always in that order.

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