The Business Blog at Intuitive.com

Dave Taylor has been involved with the Internet since 1980 and is widely recognized as an expert on both technical and business issues. He has been published over a thousand times, launched four Internet-related startup companies, has written twenty business and technical books and holds both an MBA and MS Ed. Dave maintains three weblogs, The Business Blog at Intuitive.com, focused on business and industry analysis, the eponymous Ask Dave Taylor devoted to tech and business Q&A and The Attachment Parenting Blog, discussing topics of interest to parents. Dave is an award-winning speaker, sought after conference and workshop participant and frequent guest on radio and podcast programs.

While local video rental stores fight over inventory, the industry moves on...

Here in Boulder, Colorado, there's an interesting business battle playing out both in the DVD players of residents -- many of whom are students who attend The University of Colorado at Boulder -- and in the pages of the local newspaper.

The latest volley in the battle between local video rental shop Video Station and the newly opened branch of national chain Hollywood Video came today in our local paper The Daily Camera. In an article entitled Video Wars: Video Station girds for battle against Hollywood Video's "film library" the basic dispute is laid bare...

Prior to Hollywood Video opening up an outlet in town, Boulder was characterized by slowly failing video rental stores. Blockbuster, for example, shut down one of its two stores in town, citing the cost of staying open versus the per-store demand, and even the local movie theaters have had a tough time competing, most of them slowly spiraling towards bankruptcy.

Throughout this time, however, Video Station has remained a popular local choice for video rentals with its unusually large selection of foreign and non-mainstream videos and DVDs. Indeed, Video Station claims to have 55,000 different videos in its stock, an impressive number by any measure.

So when Hollywood Video opened its new store with a banner proudly proclaiming "Boulder's Largest Selection of Videos: 45,000 in stock" it's understandable that Video Station got a bit upset.

Since then, however, Hollywood's designated the Boulder store as one of its experimental film library locations and sent sufficient additional titles to the store so that it now counts over 58,000 titles in stock, indeed making it the largest inventory in town.

I find it interesting that the battle's being played out in the local media, suggesting that it's yet another retread of the Biblical David and Goliath battle that retailers face every day when they compete with larger conglomerates (the most common of which is the Walmart Syndrome, of course). But unlike the wonderful and inspiring story from the Bible, there's a significant missing element in this epic battle: does anyone really care?

Consider what happens a year after the heated debates surrounding the approval of a Walmart building permit. The no-longer-controversial stores are always busy with locals, those same locals who decried the invasion of the big box store, the same locals who swore that they'd keep all their business at the local shops and would never be caught dead at Walmart. What happens? Pragmatic reality sets in and people realize that it's one thing to say "no" and another to cast a vote with their wallet each and every time they go shopping. People hate Walmart, but darn it, they do have good prices.

In a similar manner, Video Station and Hollywood Video are fighting a turf war here in Boulder, but Blockbuster, Netflix and even Walmart already demonstrate that the battle for the future of video rentals isn't about storefronts and retail at all, but rentals through the mail.

And they're all in grave danger of obsolescence in the next few years as the major movie studios figure out how to tie a workable digital rights management system into online on-demand video rentals. If you could search online through a database of 75,000-200,000 movies, click a button and for just a few dollars have it automatically downloaded to your Digital Video Recorder or TiVO for 14 days, why would you ever leave your house to visit a rental store or both waiting a few days for your latest DVD to arrive in the mail?

If you're fighting a turf war in your market, it's critical to ensure that the rest of the battle hasn't moved to another front entirely while you're busy kicking up more dust.

Otherwise you'll win the battle but lose the war.

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