business news in context, analysis with attitude

To hear Kevin Coupe’s weekly radio commentary, click on the “MNB Radio” icon on the left hand side of the home page, or just go to:

Or, to simply read the commentary in text form, continue below…

Hi, I’m Kevin Coupe and this is MorningNewsBeat Radio, brought to you by Webstop, your first stop for retail website design services.

There have been a number of headlines this week about how Blockbuster, looking to put a severe dent in the online movie rental business done by Netflix, introduced a new, dramatically lower pricing plan that it hopes will induce people to leave Netflix and start doing business with Blockbuster. Analysts say that Netflix either will have to cut its prices or lose market share. Meanwhile, both companies are testing the online download model, and there have been plenty of rumors about Netflix possibly being up for sale, with Amazon – which itself offers video downloading – said to be one of the interested suitors.

Now, I’m hardly a disinterested observer. To be frank, I hate Blockbuster. Always have. I’ve hated the company for so long that I can’t even remember why, though I think it had something to do with a lousy selection and high late fees. I know that my dislike for Blockbuster was compounded when it introduced a program several years ago that I considered borderline fraudulent – saying that it had no late fees when in fact, if you had a DVD for too long, it actually charged you as if you’d bought the movie. I’m not the only one who thought this was a fraud, by the way – the State of New Jersey sued Blockbuster and won a settlement, and the campaign was shut down. I know this goes back a couple of years, but this is the kind of stuff that annoys me – and I get to use this soapbox to rant about them.

On the other hand, I am a huge fan of both Amazon and Netflix. At Amazon, I’ve been a regular, even frequent customer since March 16, 1997, and I’ve bought everything from books to groceries on the site. As for Netflix, I love the company’s recommendation service, and while I think they’re going to have to lower their prices to be competitive, I’m not leaving, certainly not to go over to those weasels at Blockbuster.

Was ‘weasels’ over the top? Sorry. I got carried away.

Anyway, I bring all this up because even as Netflix and Blockbuster wage a price-related battle over online DVD rentals, Apple made news this week when it revealed that it is working on a plan which would use its iTunes service – through which you currently can buy and download music, movies and TV shows – to facilitate limited time rentals. You’d go to iTunes, download a movie for maybe $2.99, and then have a limited window within which to watch it before it would vanish from your computer.

Not all the movie studios are thrilled by this idea, in part because there is real concern about Apple having too much power in the movie and television distribution business…which I think really means that the studios are concerned about losing their own power.

But the real point here is that all the old business models are going away. If a supermarket is spending a lot of time trying to figure out what its video rental department should look like, it may be a complete waste of time because physical rentals may soon be a thing of the past. Maybe not this year, and maybe not next year, but faster, I suspect, than any of us expect.

It seems to me that this is what we all have to do with our businesses, whether we’re selling food from a brick-and-mortar store or selling ideas over the Internet. We have to be looking for the next big thing, the idea that is around the corner that maybe nobody else yet sees, the concept that will give us an unassailable advantage…at least for a few hours, weeks or months.

More than ever, the business models are not just old, but obsolete.

He gets a bad rap these days in some quarters, but I like a quote from Charles Darwin that seems applicable:

"It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change."

For MorningNewsBeat Radio, I’m Kevin Coupe.
KC's View: