Renting movies

I'm back around after a long weekend, and I'll be in and out today and tomorrow as well on some family business, but I thought I'd share this amusing infographic on the changing (improving?) movie rental industry, courtesy of Barry Ritholtz.

Of course, as an Amazon fanboy, I'd also point out that a ton of movies (many more than Netflix Instant) are available for instant rental on Amazon.com (as well as through iTunes), but I digress. Funny stuff anyway.

Sometimes, the consumer does win

Alright, I'm always harping on the need for innovation (and entrepreneurship) to get us out of our economic doldrums. So much so that I'm not even going to bother linking to my old rants--if you've read me before, you need no reminder of my views. I usually harp about the lack of innovation, and how consolidation of industries limits competition and drives down the overall level of innovation, thus essentially screwing the consumer.

This is not one of those times. This is awesome:

This is the second major announcement by Amazon this month, following on the heels of their "free streaming video for Amazon Prime customers" offer (admittedly it's limited to select titles, but I've watched Syriana, Man On Wire, and Exit Through the Gift Shop for free this month, while paying only a combined $5 to rent The Fighter and The Prestige... and I've gotten $300 dollars worth of products, including a propane grill, shipped to me for free. Yeah, I'm an Amazon Prime fanboy--so be it).

Amazon is one of the few companies that I truly admire right now. They've got brains, they've got guts, and they truly do try to innovate and provide value to their customers in creative new ways. Their products (and their site arrangement) might not be as pretty as their competitors, but they're every bit as functional, and in some ways better (most notably, they don't "protect" their audio files like iTunes does so that they can't be played on non-Apple media players, which is bulls**t). And their prices can't be beat.

Ultimately, I admire any company with the stones to take on both Netflix and Apple in the same month. Maybe it will work out for them, maybe it won't--but any company that stared down the dot-com bubble burst and survived isn't a company I'd bet against.

R.I.P. Blockbuster

With today's unsurprising news that Blockbuster Inc. will file for Chapter 11 bankruptcy protection in the immediate future, we prepare to say goodbye to another brick-and-mortar company done in by industry changes brought on (in part) by the internet. While Blockbuster is not officially closing its doors, it has plans to close nearly half of its retail stores, while expanding its self-serve kiosk business (those Redbox-style things you see at gas stations and grocery stores). Nevertheless, the handwriting is clearly on the wall for Blockbuster, and their competitive responses might be a case of too little, too late.

Ultimately, Blockbuster was caught sleeping while Netflix and iTunes took over the rental market, with Redbox further eroding its margins. Much like Circuit City before it, Blockbuster was slow to respond to obvious changes in the way that consumers used their product, and it will likely meet the same end. Ironically enough, Blockbuster tried to step in and buy Circuit City before its failure.

Of course, what I choose to focus on in this news is what happens to an industry when its biggest player is allowed to become bankrupt. It would be hard to argue that the media industry is less robust or consumer-friendly than it was when Blockbuster was in its heyday. Rather, the death of Blockbuster is an instance of creative destruction, a necessary step in the evolution of the rental business. Why, then, do we feel compelled to respond differently when the company in question is a bank, airline, or car company? Are we holding back progress in those industries simply to preserve the comfort of the status quo?

Bankruptcies might not be pretty, and they might in some cases create painful frictional periods as we adjust to a new reality (and as displaced workers find new jobs). I, for one, wish I knew what our economy would look like if we allowed for institutional failures in all industries. What would be the car industry analogue to Netflix, if GM were allowed to fail? Who would become the Amazon.com of the airline world? Unfortunately, as long as we continue to selectively protect certain large failing businesses, we will never know.

[Wall Street Journal]