iTunes Rental Service

Well, just yesterday the iTunes store started to provide new movies that are available to rent. It may sound weird to download something to rent, but it simply means that once you have downloaded it and started it, you have 24 hours to watch it before it disappears from your hard-drive. It will be interesting to see how this plays off. I, myself, have not attempted to buy a movie off iTunes yet, I mainly just buy the DVD instead. With the new rental service, I may try to "rent" one of their movies and see how the quality is. I hear that downloading movies is suppose to be the future instead of movies on discs like DVD or Blu Ray. We will see how it all plays off.

Speaking of movie rentals, I was reading in my textbook and found a few questions about the movie rental industry. They ask questions that I will attempt to answer:
1. Is the buyer power low or high? I believe it to be high. We see so many movie rental businesses, there are so many in the city that I live in, and plus there are other options like Netflix where you can rent the movie from their website and they send it to you directly by mail.

2. Is the supplier power low or high? I think the supplier power is high. A lot of the rental stores create a limit of what will be available at their stores or the amount of new rentals available. I really like Netflix, they have so much to choose from, but yet it is a little more difficult because I don't think they have many copies of new rentals available, so if I want to rent a new release, my chances of getting it may not be so great.

3. Which substitute products and services are perceived as threats? As I discussed earlier, downloads or the ability to watch a movie immediately on your computer is growing. It could easily hurt the businesses that only have the movies at their store. As well, having the movies delivered right to your mailbox is becoming increasingly popular.

4. What is the level of threat of new entrants? That is, are the barriers to entry high or low? What are the barriers to entry? The barriers to entry are pretty high, as we see the movie rental business trend shift from picking up your movies at your local video store to having them delivered to your home or watching them immediately on your computer. In order to start a movie rental business, you need a ton of movies available to offer in order to compete with other high profile businesses like Netflix or Blockbuster, and these new trends will make it harder for new businesses to enter into the movie rental industry.

5. What is the level of rivalry among existing competitors? Create a list of the top five competitors in the business. a)Blockbuster b)Netflix c)Hollywood Video d)Movie Gallery e)iTunes. Some may be a little off and the last one just entered into the industry, so we will see how it does. The main competitors are Blockbuster and Netflix. The other ones are seen as alternatives that probably don't stand too much of a great shot due to the new technology coming for. Blockbuster and Netflix are moving forward in areas that are growing. Netflix increased it's availability to let their subscribers immediately watch movies on their PCs in wake of the announcement of iTunes having rentals available.

I do think that the movie rental business is a very good one. I have gone to the video store a lot when I was a kid. There is indeed a lot of money made in this business. As far as entering into the business, it is a good one due to the money made, but not an easy one to survive in now due to the new technology and trends of the 21 century. If I were to start my own movie rental business, I would make sure that I would have a decent selection of movies that are available to rent and make sure that I stay current to new releases, I would also be aware of the new technologies coming forth and try to use them to my business, like Blockbuster now allowing rentals to be delivered to customer's doorsteps like Netflix does when they realized what customers wanted. It would be a hard business, but would be fun to have a video store of my own.

By the way, today for the first time I saw the movie "Singin in the Rain" which was made back in the 1950s, I actually have to say that it was a very good film. The actress with the really high pitched voice reminded me of George Constanza's mom in the TV show "Seinfeld". We watched in one of my classes.