OnDemand killed the video star

A few weeks ago I went up to Callahan, it’s the town where I purchase my chicken feed. I had nothing better to do, and had some time to kill, so I decided to check out the few shops and the library, maybe get me some lunch while I was at it.

As I drove by, I noticed there was a large sale going on at the Movie Gallery. I decided to check it out. Upon closer examination, the signs all read “Store closing, everything must go” then there was a list of percentages, how much off the normal price things were going for.

At this time they were still renting films, as though an influx of cash could save them. Within a few weeks, even those films had to go.

Somehow, I knew this would happen. All 2009 we rarely rented one film from them every 3 months. And even those films didn’t help. They had called us and gave us a free rental to entice us back in the store. I’m sure we weren’t the only people to receive a free rental in this manner.

I went there last night, Saturday March 27, and found that every film in the store was either $1 or $2, a small handful of never-before-rented films were listed as 80% off their list price. For a $25 film, that meant the price was now $5.

Ever since the day I learned they were going out of business, I must have bought at least $60 worth of DVDs. But even that number doesn’t tell the whole story. Last night my total was $120 before the cashier put in the code to bring the price down to the sale price. It came down to about $32. A savings in the area of $90.

This isn’t the only store going under. The K-Mart about 10 miles down the road is going down as well. As of this writing, it may have already closed its doors for the last time (Movie Gallery’s last day is Monday March 29, 2010).

Both stores have been busier than they’ve ever been in the time they have existed. I cannot help but feel like a vulture come to pick the bones off a dead creature whenever I venture into a going out of business sale.

While I do not know the exact reasons for the K-Mart store’s downfall, I know what caused the Movie Gallery to fall.

While I don’t believe it’s 100% responsible, there is a Red Box outlet about a hundred yards or so away, in front of the largest grocery store for over ten miles (perhaps more), then a mile down the road at the McDonald’s there’s another one, heck, McDonald’s sometimes runs a promotion where if you order a large value meal, you get a code for a free Red Box rental. Also the Red Box charges $1, whereas Movie Gallery charged $4 or $5 at the end.

When Movie Gallery first opened years ago, they pulled the old Standard Oil tactic of undercutting the competition. Movie Gallery charged $1 for weekly rentals until their competition (which charged $3), went out of business. At which point, Movie Gallery increased its prices.

Back in the late 1990s, where else were you going to go? We did not have fast Internet speeds, NetFlix was founded in 1997, but did not get big until much later. OnDemand didn’t become the phenom it is now until just a year or two ago.

So you see, things were limited in the late 1990s, but the world of 2010 has many options. These are what killed Movie Gallery.

Note: The whole chain isn’t going out of business, it’s only a few stores.

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