Blockbusted

[Note: This was originally posted on another of my blogs on 9/1/10. In the interest of organization and consolidation, I've moved it here.)

In my regular travels across the vast internet wilderness, I came across a story on /Film that's worth noting. It's not that there's anything particularly enlightening about it or that it's even very surprising somehow. Blockbuster video is closing up shop and filing for bankruptcy in September.

This might seem like a story which would be more at home in my movie blog, but there's a little more to it than just "giant movie rental chain goes belly up". It would probably seem to make more sense for someone like me, a rabid movie fan, to be saddened by the death knell of an outlet through which people might be able to see more movies. David Chen, one of the regular contributors to /Film, certainly seems to be. I'm not. At all.

When I was growing up, and the obsession with film was just starting to take root, we had two video stores in town. One was in the local supermarket shopping center, and it was the first video store my family had a membership with. I was a bike riding fool as a kid, so I was constantly peddling from one end of town to the other. Whether it was to go fishing, swimming, play ball somewhere, trying to find the place which would allow my bike and I the most air and the greatest speed, I wasn't confined to a very small area. On the other side of town from where my mother and stepfather bought our first house, there was another video store, and having the first twinges of obsession with film, I would occasionally stop in there, curious to see if a video store was a video store was a video store. In more ways than not, I was a typical middle class kid at that age, and in that time.

It was called Ultimate video, and it sat on the corner of Main St. and Railroad Avenue, a stone's throw from the local little league field. Ultimate Video was proof that not all video stores were created equal. It was a relatively tiny little place, but compared to the store at the other end of town, it was a veritable treasure trove. The shelves were packed full of video's whose covers ranged from bizarre to exotic to almost mind numbingly boring. It didn't take but a few visits for me to realize Ultimate Video was indeed ultimate, and far superior to the video store my parents had decided to sign up with. It became a source of constant irritation. When we had the good fortune to be able to go and rent some videos, I knew I was missing something. The Other Video store (which is invariably how adults referred to it) was further away (by a whole mile and a half), and to them, one video store was the same as the next.

For those first few years, I made due. I found what I could in that initial place, and at least got a movie fix once in a while. But, when my parents moved us to the other side of town (the side Ultimate Video  was on), it finally happened. We got a membership at Ultimate Video and the pain of having to browse the less worthy shelves of that crappy store was finally ended. That first store, the name of which I can't even remember anymore, went belly up not long after. People were figuring out that Ultimate Video had the real goods. From that point forward, I spent many hours perusing the shelves of that tiny little video haven. Going to rent a movie became an event that took me a few hours. When I say tiny, I mean it too. It was probably twenty-five by thirty-five, but there were so many shelves packed in there, it was like a little maze. I'd walk through those aisles, whose top shelf I had a hard time reaching at first, and scrutinize the cover of every single video. Does anyone else remember being completely awestruck by the glowing eyes on the cover of Dead Pit? It was a terrible movie, but that cover was a genius marketing move. If something seemed like it might be a candidate for the day or evenings viewing experience, I'd pick it up, read the plot summary on the back, study the frames from the film, and set it back, making a mental note. I spent so much time in that place as a kid, I'd occasionally just grab a stack of video's waiting to go back on the shelves and put them out. I knew where they all went, and I was in there so often, the proprietor trusted me enough to know I wasn't heading for the door with a stack full of her videos.

She got to know my mom pretty well too, because I'd come in pick a video and if it was R rated, she'd have to make the call. At first, I'd be standing there phone number in hand, but it wasn't long at all before it was just written down on our membership card, and not long after that, the owner memorized it. She'd call, tell my mom what it was I was trying to rent, give her a basic idea of what it was about and why it was rated R (this was about the time PG-13 was making it's debut, so for a while, I had to go through the same process with those), and my mom would give her the yay or nay vote. Luckily for me, before video was at my disposal, I'd developed a pretty voracious reading habit. Being an only child, and a latch key kid, meant lots of time to yourself, and even my dog would get tired at some point, so I needed something to keep me busy. I had made the jump from strictly kids fare to Stephen King, Shakespeare, H.G. Wells, Mark Twain and so on pretty young, so my parents weren't too restrictive in what movies they'd let me see. Occasionally, something was just a little too much, but I knew the line, and I wasn't interested in putting anyone through the hassle of having to call my mom about a video I knew I wasn't going to be allowed to see (I Spit On Your Grave and Faces Of Death taunted me from those shelves). That reading habit had already started me on an interest in all things horror. I waited impatiently for the newest Stephen King novel to make it to paperback in those days. Paperbacks were cheaper, and they either fit in my pocket or in my waist band in the small of my back. It didn't take me long to figure out that I had to read the first few chapters before I could start carrying that way. Little boy sweat tended to smear the print pretty horrifically at some point, and the covers and first few pages would end up disintegrating. Poe and Lovecraft would satiate my hunger for horror while waiting for Stephen King's next page turner. If those paperbacks were my introduction, my elementary and high school of horror, science fiction and all other forms of narrative geekery, Ultimate Video was my undergrad. It was the kind of business that recognized itself as part of a middle class community, and the owners did their best to live up to that responsibility.

They certainly did a service for me. I was just a regular middle class kid, and without the likes of places like Ultimate Video (and The Record Stop, the areas independent record store), there are so many things I either never would have been exposed to at all or it would have been so much later, that they may not have made as much of an impact on me. Prior to these kinds of businesses existing, you couldn't see a lot of these films in the suburbs, you had to live in a major metropolitan area, and catch them in the theaters. The same was true for music. If you didn't live in a major city, there were many things you just didn't get exposed to and which remained too obscure for far too long. These kinds of businesses opened up a whole new worlds for middle class kids, adolescents and adults who were looking for something a little different from what the local multiplex was playing of the local radio station was promoting.

I wasn't necessarily interested in what the newest videos were. There were plenty of weeks during which whatever was newly released just wasn't interesting to me. Sure, I could sit through and relatively enjoy some big, loud, dumb action movie, just like any other boy, but I had already figured out it's better to see something a little older and well done than something new that just wasn't any good. In my mid-teens, the point finally came at which I'd seen basically every catalog title they had in stock that I had even a remote interest in, but by that point, the video boom was in full swing and there were video places everywhere, and of the record stores which carried lesser known music started selling video titles that were a little outside the mainstream. At that point, Ultimate Video would order stuff for me if I asked for it, and on one or two occasions, they didn't even make me buy it, they just put it in with their rental catalog.

Unfortunately, the video boom also brought the huge rental chains, Blockbuster Video, Hollywood Video and the like. The first time I walked into a Blockbuster, I was initially wowed. It was so big and the aisles were wide enough to walk past someone else without having to press yourself against the shelves, and it seemed like there was just an endless supply of movies. And in the first year or so they were coming to prominence, they had a decent selection. It still wasn't quite as good as Ultimate Video, especially if you were a horror fan, but it wasn't too bad, and if I couldn't find a horror flick I wanted to see, I could find something in another section. But then, over time, the selection started to get worse and worse. There was less and less room in the store devoted to catalog titles, and more and more devoted to new titles. There would be ninety copies of the Meg Ryan romantic comedy they'd given a new name and cover, but when a fellow horror aficionado was finally convinced he could not go another day without seeing Cannibal Holocaust, it was nowhere to be found. It wasn't that it was already rented and just not in stock. They didn't even carry it. When I asked about it, I was told there were some titles they didn't carry because of their content. And that kind of thing started to happen more and more often. It wasn't necessarily always content that kept things off of Blockbusters shelves either. It was the kind of corporate decision making that decided a title wasn't going to have enough demand to be worth carrying. I get that, every business has that right, but I can't for the life of me figure out how those decisions were actually made. There were plenty of things on that "New Release" wall that even I had never heard of, and I spent more time than anyone I knew reading magazines (because there was no internet at the time), newspapers and the occasional film zine from some small press in New York City), just to know what was going to be coming out. It wasn't lost on me that most of those movies had titles like "Silk Desires", and were purported to be "thrillers" about two people caught in a web of intrigue, often involving an affair, a missing person, an insurance scam or some such nonsense. They were the softest core porn really. They were porn without the porn. Lots of fuzzy angles, the occasional moan, and silhouetted nakedness. It was like porn for the kind of hardcore "Moral Majority" type who decided tonight was going to be sin central, but you know, without the actual sinning.

There lots of those, and things like "Hood Riders", because Menace II Society and Boys In The Hood had just gained popularity and acclaim, and retailers of all varieties were starting to try and seem like they were "urban friendly", but getting a copy of School Daze, before Do The Right Thing hit, was impossible. All of that stuff was in abundance, but when I read about a film called Salo by Palo Pasolini, a disturbingly violent and sexually graphic, but intellectually unparalleled cinematic meditation on the realities of fascism and totalitarianism, it was nowhere to be found, and by that point, the Blockbuster's of the world had put the Ultimate Video's of the world out of business. The American middle class had turned Blockbuster into the nine hundred pound gorilla of the video rental industry. When I asked the guy behind the counter, whom I knew to be the manager, if he could possibly order a copy for me, it seemed as if I had asked him to build me a space shuttle behind the store and use some kind of alchemy to turn popcorn butter into rocket fuel. When I finally decided there might be more to The Seventh Seal than a bunch of pretentious film student posturing, I couldn't find a copy of that either, and it's widely considered one of the two or three greatest films of all time. It's not that obscure a title, at all. It's something you can see referenced in the pages of any newspapers film reviews, as long as it's a paper written on more than a seventh grade reading level (unlike the Richmond Times Dispatch). And three quarters of the people working in the stores had never even heard of these things. 

And that trend continued. Fewer catalog titles, more new releases, and straight to video "niche market" titles became the regular business model for rental chains.

Blockbuster was not a business which saw itself as part of a middle class community. Without a middle class, they would never have reached the level of success they did, but being a part of and enriching that community was not something Blockbuster was interested in. They were interested, first, foremost and only in squeezing every dollar they could out of that middle class. It's something we've seen plenty of in our lifetimes. Companies are built on a customer base that is middle class, but it's only interest is in taking what it can get, and they claim their only responsibility is to their profit margin and their shareholders. To the community that makes them successful, they are only responsible for providing a product that consumer community will buy or can be convinced to buy. It doesn't have to be a quality product, it just has to be something they can sell and we will buy.

Then, the digital revolution truly began.

I was actually working in a record store when Napster made the front page of almost every newspaper in the country (except, of course, The Richmond Times Dispatch). Music was being shared across the internet, for free, by hundreds of thousands of college students everywhere. This wasn't news to me, I'd already had more than one person scoff at the twenty dollar per CD price tag and mumble about downloading it from Napster. Personally, I wasn't doing the whole download thing. I not like the way the music industry conducted a lot of it's business, but at least the people creating the content should be getting paid enough to keep creating content. Napster and it's users were basically screwing the people whose music they were fans of, which didn't make much sense to me. The music industry was very quickly in complete chaos. Those of us working in the stores were hoping they'd at least be smart enough to get on top of things and start offering music for sale, online. Then came the Metallica suit, in which the band sued the users sharing their music. We all saw the writing on the wall. Suing the fans is the most idiotic possible way to stop digital piracy. You're punishing your fans, for what amounts to cents on the dollar for you. The fans knew enough to know the overwhelming majority of profit for music sales went to the record companies and the artists make the money on merchandise and tours. Well, there were some attempts, most of which were pretty laughable because either the digital security measures were so draconian users couldn't actually play the music on all of their different machines or the pricing was ridiculous. I was somehow not shocked that people weren't going to pay fifteen or twenty bucks for music that didn't come with a package of any kind. There was no hard disc copy, no liner notes, no cover art, none of it. It was just the music, which is worth having and why you buy music in the first place, but without the rest of it, and with the modern consumer being savvy enough to know how much of the cost is in the production of a physical product etc., people knew they were getting screwed. The music industry had spent too much time fighting the future, and trying to keep it from coming, and in many ways had gotten left behind, and still hasn't caught up. Now, Apple almost entirely controls the market, because the record companies spent their resources trying to keep the digital revolution from happening, instead of trying to figure out how to capitalize on it.

The exact same thing has happened to the movie industry, and especially the rental industry. Because they've gotten locked into a business model which has been extremely profitable, but which hasn't served the consumer very well, and they have been more willing to try and fight the inevitable than expend the energy to develop some new ideas, they've gotten caught with their pants down. The major film studios are in the process of bringing exactly the same kind of suit, against end users (fans) that Metallica did. They've run into a bit of a rough patch with that suit though, because none of the internet service providers have enough people on staff who can bring them the names which match the IP addresses they've nailed down. Three to five people on staff, finding IP addresses for a company like Verizon, who typically have to track down twenty to one hundred a month for criminal investigations, are suddenly saddled with a list of thousands, and they just aren't able to do it. It's not looking good for the studios on that front either.

And for the likes of Blockbuster, this has been a long time coming. They too fought the digital revolution for longer than was wise, and by the time they started doing their own rental through the mail and download content, it was way too late, Redbox had already eclipsed the new release market for the casual movie fan, and for the serious film obsessive like me, Netflix streaming capabilities and the mail to home rentals is like having forty Ultimate Video's in my living room.

I have a deep sympathy for the employees of Blockbuster who are going to lose their jobs. But the thing is, this is something that's happening in many different American industries. The inability to even consider attempting to change the model of a business because they are so anchored to the idea that this is the only way they can profit, is not good for anyone, at all. This is really no different than what happened with the American auto industry, except Blockbuster isn't a big enough part of the economic picture and American identity to get rescued. Things are changing, quickly now, and for those businesses who are incapable of trying to develop REAL INNOVATION it's going to be the end of the road. Right now, there's a significant push back against the green movement and the idea of climate change, but that's not going to hold up forever. At some point, hopefully sooner than later, people are going to realize it is an actual reality, and the only fantasy and conspiracy perpetrated upon them has been by those who keep denying it. There are businesses out there who are capitalizing on the future that's coming and putting themselves in the kind of position to be the industry leaders of the future. The question is whether or not there will be qualified Americans for them to hire.

The same thing is happening to the middle class in many ways. It's been the middle class who have made so many of these companies and industries incredibly profitable. People are clamoring to bring the jobs back that have been sent overseas. Well, I'm sorry to be the one to tell you folks, but it's not going to happen. Those jobs are never coming back, and we're going to have to figure out a new way of structuring our economy, which means developing a new way of creating and sustaining middle class existences. As globalization was becoming a reality, the question of how the American labor force was going to compete against labor forces which can successfully live on two to five dollars a day was put to many of the people who were singing the praises of globalization. The answer was always education. The American Educational system is a complete mess, and the answer they have for you? It's not stop stripping funding from public schools that gave us a middle class which made us the most powerful economic, military and political force in the world. It's start privatizing it. That's been the same answer we've heard to just about every problem we've faced, even when those problems have their basis in the private market failing to provide what people need. And what happens when those private educational industry face the same kind of unstoppable future that the auto industry, music industry and film industry have faced and they refuse to change because their past models have been so profitable? What do Americans do then?

In 2006, America was graduating fifty-thousand engineers each year. Fifteen years prior, we'd been graduating sixty thousand engineers every year. In 2006, China was graduating over three hundred thousand engineers. Fifteen years prior, fifteen thousand. And what are we talking about right now? A community center in Manhattan. This is no different than Blockbuster trying to close it's eyes and act like Netflix and Redbox don't exist. We are not making the changes to the way we do things that are going to prepare us for the future that is coming. We are not realizing and taking into account that what it took to be, become and stay middle class is changing at an exponential rate. Middle class wages have been frozen, to the point of falling behind inflation, for thirty years. We can't afford to ignore these problems if we're going to continue to be and have a middle class. If we do, we're going to have ended up exactly like Blockbuster video, for exactly the same reason.

Blockbuster video was once the largest most powerful rental chain in the country and the world. The American auto industry was once the largest and most powerful auto industry in the world. The Unidted States once had the largest and wealthiest middle class in the world. One was recently rescued from utter destruction by the federal government (a government take over that saved their asses from being owned by China). Blockbuster won't exist in another few months. And the middle class is facing a dilemma. The model which created the middle class is no longer working. We are watching the world change around us, and we can become the leading edge of that change or we can get left behind. Are we going to keep on the path we've been on these last few decades or are we going to be the one's leading the world into the scientific and technological age? Are we going to be providing the kinds of services which make those advances as efficient as possible or are we going to be watching India, China, Korea, Japan and others beat us to it? Blockbuster and the auto industry refused to accept the realities of the changing world. America was once an economic and political powerhouse the likes of which the world has probably never seen, specifically because it had a thriving working and middle class. If those middle and working class people don't start waking up to the realities that just wanting things to go back to the way they were and not trying to start developing some new approaches to the changes of a changing world, we may very well end up in much the same place as the auto industry and Blockbuster video.