Renting a movie used to be a hassle before Netflix. Instead of streaming something through your TV or waiting for a DVD to show up in your mail, you had to drive out of your way to visit a video rental store. While many towns had independently owned video rental places, one video rental chain reigned supreme. I’m talking, of course, about Blockbuster Video.
Blockbuster Video was like Netflix before Netflix. There were 9,000 Blockbuster locations nationwide at the company’s peak, each offering movies, specialty videos, video game rentals, and a handful of unhealthy snacks. For many cities and towns, Blockbuster was the only alternative to going to the movies, which put them at a big advantage and made their stock an attractive buy at one point.
Blockbuster started to lose its luster when Netflix DVD deliveries became the norm. The company closed hundreds of locations at a time as their stock dropped to almost nothing. Blockbuster eventually liquidated their remaining stores as streaming video made people forget that DVDs were still a thing. Suddenly, the once-mighty rental chain became just a name used by several companies.
Yet Blockbuster never went away completely. Sure, they don’t have thousands or even hundreds of stores anymore. Yet in some parts of the United States, you can still go to a Blockbuster Video. How are these stores still alive in the age of Netflix?
Some parts of America have crappy internet.
Netflix’s streaming platform is the most popular service the company offers. To use it, one needs a high-speed internet connection. Unfortunately for some Americans, high-speed internet isn’t an option. Many less populated or rural areas still have slow or dial-up internet, making streaming video and other forms of digital entertainment impossible. Hard-to-reach towns and communities that do have broadband internet often pay more than users in major cities, making streaming video impossible without paying absurd monthly bills.
Blockbuster serves a much-needed purpose in some communities.
For towns in Alaska, Oregon, and Texas, Blockbuster exists as a viable competitor to Netflix. These locations, which are mostly managed and owned by a man named Alan Payne, stock new movies, TV shows, classics, and everything else Blockbuster was known for during its prime. According to Payne’s interview with The Washington Post, 20% of all rentals are of TV shows, letting offline watchers binge-watch TV just like Netflix users. Payne’s Blockbusters also still charge late fees, something Netflix users never have to bother with.
Blockbuster isn’t making a comeback.
The dozen or so existing Blockbuster locations serve small communities who cannot enjoy the modern conveniences of on-demand streaming. They also attract the nostalgic crowd who still yearn for the days of trekking to the local video store. Yet while Blockbuster and other independently owned video stores exist in spots around the country, their days are numbered. If these locations receive better access to broadband, then they’ll have less use for an old-fashioned video rental stores.
There’s also the fact that the nostalgic video-renting crowd is aging. Younger generations either don’t know or don’t care about video rental stores, and their appeal will eventually be lost completely.
You can invest in Blockbuster, but shouldn’t.
Blockbuster still exists as a stock, albeit a penny stock on the over-the counter market. A single share of the company’s liquidated assets currently goes for less than a penny. If you’re new to the stock market, we highly recommend you avoid penny stocks like the plague. If you really want to invest in a video renting service, you might want to check out Netflix ($NFLX), seeing as they’ve put most other like services out of business.