[hugh]

Sales at Rogers Video continue to plummet according to financial results released by Rogers Communications today.

YTD sales are down 45% and losses piling up

 

[audacity]

If the market transitions to streaming video as quickly as I believe it will, major video rental chains don't have much time left. The "red box" style kiosk businesses will be able to survive much longer, but Rogers won't because having lots of real estate and employees won't be viable in the future.

 

[hugh]

My guess is that long term Rogers Video is gone but I don't see it going the way of the dodo for a number of years for several reasons.

- With Blockbuster Canada gone, my guess is that revenues may actually increase in the short term as former BBC customers look elsewhere.

- Rogers Video stores also serve has cable and wireless sales and service locations in Ontario and Atlantic Canada so they have value even if the chain breaks even.

 

[spun14]

You also have to account for the fire sale that they had on inventory from blockbuster. Picked up a lot of blu rays from different blockbusters in my area, lot of new releases and such which were heavilly discounted, i'm sure many others did the same which would have left Roger's stores low on sales for a few months.

I think the next 3 - 6 months stats would be more telling on how they're going to be for the forseable future.

Also a lot of the stuff is poping up on On demand earlier then it ever has. Most movies had a delay but most of the bigger movies are popping up same day as release.

 

[billpaidJr]

I agree with Hugh. Their store locations offer a value added service for people who prefer to deal with Rogers at a brick and mortar location instead of online or over the phone.

They are much more diversified than Blockbuster ever was...plus the point that blockbuster Canada was still making money and was dragged under by its US counterpart...we should see Rogers video survive quite a while yet.

 

[elvisrun]

A friend of mine who works in real estate at Rogers has told me Rogers Plus is business as usual unless/until a store's lease comes up for renewal. If they are required to move, they will relocate the store but eliminate the video rental business for that location only. So, for now, the business is moving forward but not expanding.

 

[audacity]

plus the point that blockbuster Canada was still making money and was dragged under by its US counterpart...

If Blockbuster Canada was worth more as a whole company (i.e. it was a viable business going forward) then it would not have been liquidated by its creditors, I assure you.

Going forward, the video rental business doesn't appear to be profitable - at least according to the owners of various video rental stores who are voting with their feet and getting out of the business. If the video rental industry continues to dwindle at its current rate (YTD sales down 45% for Rogers), it won't be long before Rogers won't be able to make a "hey, at least we're breaking even" argument anymore.

 

[que3jxp]

I would bet that Rogers and other regional rental locations will get a 6 to 9 month long bump from the BBC closure but that it will be all red after that for the majority of them.

This is not a Rogers issue but just an inevitability for most of the disc rental industry. The only areas that will remain safe are those that are not serviced by broadband or that have severely limited DL/UL allowances.

Rogers will likely reassess how far out into the rural areas they are willing to run their infrastructure and then make a move to that and close as many stores as they can (The rental portions) to make up the revenue.

 

[billpaidJr]

If Blockbuster Canada was worth more as a whole company (i.e. it was a viable business going forward) then it would not have been liquidated by its creditors, I assure you.

Quite right...the US Blockbuster creditors liquidated US Blockbuster and the Canadian part was put up as collateral when they first restructured hence they got dragged into the US side bankruptcy.

It was well documented that the Canadian part could have lived on a while longer but was cut short because of the US side debt.

Blockbuster Canada has been pushed into receivership by the Hollywood giants that provided it with new releases, after the studios called in $67-million (U.S.) in debt racked up by its U.S. parent company.....
Brahm Eiley of Convergence Consulting Group Ltd. estimated the company was profitable, and generated about $400-million (Canadian) in revenue in 2010 – including rentals and the sale of movies and items such as popcorn and candy.

 

[hugh]

Please lets focus on whether we think Rogers Video will stay in business rather than rehashing BBC history which is the topic on existing threads.

 

[ScaryBob]

Video disc rentals are plummeting, not just for B&M video stores but also mail order video rental services. Rogers Video will survive a bit longer due to its position as part of a very profitable Rogers empire but I doubt Rogers will support a money losing subsidiary for long.

 

[cooper83]

If Rogers stores in Victoria are any indication of an overall trend, then yes, it's only a matter of time before they're all gone.

 

[thelovelylad]

they don have a hard problem to figure out. nobody wants to pay $7 plus tax for a new release.if the independents can offer them for $3-4 then so can they.Iam only using my local area of brantford as an example but i am sure it is the same in other areas

 

[Nels Stewart]

I agree with lovelylad. Rogers charges too much, making it enticing for people to pursue other cheaper alternatives. I usually stop by my local Rogers once a week, just to keep on top of what they've got on their shelves, then take advantage of their $15 deal for three new releases every two-three weeks, depending on the quality of releases during that time frame; $5 a blu-ray, for a week, is closer to what I think I should be paying for a movie rental.
My local Rogers is usually pretty moribund during the week. Only on Fridays and Saturdays does it ever appear busy. Lower the rental fee, and I'm sure traffic into the stores would improve, and they'd move more volume.

 

[TorontoColin]

In the short run, I think that in Ontario and the Maritimes the stores are too important too close. One thing they can't quantify is how many people come in to rent a movie, and just take a look at the brochures for the other services while they're there. How many cable/wireless/internet subscriptions has that helped sold?

They can switch them all to get rid of the movie rentals, but who goes into one of those stores without intending to inquire about their various services? I think they'll keep them around as a loss leader for a while yet.

I also wonder if their rental deals are at all tied to the deals they have with studios for Rogers on Demand movies.

 

[hugh]

I agree with lovelylad. Rogers charges too much, making it enticing for people to pursue other cheaper alternatives.

If you're losing money then I'm not sure you can be charging too much. Running huge retail locations 16 hours a day costs a lot of money in rent, electricity and labour. My guess is that the cost of the disc is the cheapest part.

In my neighbourhood, I used to have a Rogers Video and two BBC nearby. Now I have none. There are no alternatives.

I would be happy to pay $7 to rent a BR disc for two nights.

 

[tjl]

they don have a hard problem to figure out. nobody wants to pay $7 plus tax for a new release.if the independents can offer them for $3-4 then so can they.Iam only using my local area of brantford as an example but i am sure it is the same in other areas

I'd say a lot of people are willing. My Rogers in Kitchener has been packed every time I've gone in. There were two Blockbusters closer to me, so I did not rent from Rogers prior to their closing, but it appears they are doing fine for now.

There are no independants near me that I'm aware of and I honestly find $7 acceptable to rent a movie.

 

[cooper83]

Running huge retail locations 16 hours a day costs a lot of money in rent, electricity and labour.

So downsize. The only video rental store left in my area (mom & pop) did just that last month. They have half the retail space they once did. But they're still in business.

Somebody else mentioned the mobile phone business portion of Rogers stores. I say in addition to smaller retail locations, get rid of the cell phones, video game accessories, and disc sales, and just stick to rentals. Who goes to Rogers (and BBV when they existed) to buy a Blu-ray disc on release day?? When I need a PS3 controller, the last place I think of is a video rental store. Why? Because it's a video rental store. That, and they're way too expensive.

Stick to the original business plan.

 

[ScaryBob]

Running huge retail locations 16 hours a day costs a lot of money in rent, electricity and labour.

That's a problem of Rogers' own creation. We had an independent video store with a great selection and good prices. Rogers moved in and they got kicked out. The Rogers store was about 10 times larger but had a smaller selection and higher prices. Not even BB stores were that overbuilt. It seems a little idiotic to have 50 or 100 copies of the same title taking up half a wall.

 

[hugh]

So downsize.

Agreed. But also you have to ask yourself, why did all the mom and pop stores go out of business when their prices were cheaper? It's because they didn't have the selection etc.

My point is that $7 for a rental of a $30 item that requires a lot of labour and overhead is not unreasonable. Also Rogers Video and BBC allowed me to buy used BR discs at 50% off new so I think they represent decent value.