Explosion of online content made stores virtually obsolete

DVD rental chain Xtra-vision is yet another victim of the rapidly changing nature of how consumers choose to acquire film and music.

While DVD rentals were once the option for people choosing to have a night in, the reality is the same material can now be bought or rented faster and cheaper online.

Like Chartbusters in 2010, and, to a large extent, HMV earlier this year, Xtra-vision was faced with the task of how to compete with the challenge posed by access to so much material online.

That it failed in developing a sustainable plan to compete with the online threat was acknowledged by the company yesterday when it said that the “the movie rental business has declined more rapidly than anticipated most noticeably in areas with high-speed broadband, which is linked to high levels of illegal downloading”.

Undoubtedly, the explosion in illegal downloading has hit high-street film and music retailers hard in recent years.

A recent report by Grant Thornton into the scale of illicit trade in Ireland stated that the total loss to the economy from digital piracy is €269m.

It found that the commercial value of software piracy in Ireland is estimated to be around $144m (€110m), while the music industry has declined by €65m in the five-year period up to 2012.

“Such losses are having a major impact on both creative and retail industries in Ireland, which is evidenced by the large numbers of recent high-profile commercial casualties with the trade,” the report said.

However, while the scale of digital piracy has clearly been a hammer blow to retailers such as Xtra-vision, the reality is that, in the future, more and more television and film will be viewed and accessed online.

Legal streaming sites such as Netflix increasingly look like becoming the norm, allowing consumers to access a huge variety of content at the click of an icon on a computer screen.

In Ireland, a Netflix subscription costs just €6.99 per month, making it more than competitive with rental stores such as Xtra-vision. Its catalogue can be streamed through a range of devices such as game consoles, blu-ray players, internet-connected TVs, and Macs and PCs.

Major TV shows are also now being made exclusively for the site — the hugely successful US remake of House of Cards starring Kevin Spacey being a case in point.

The downturn in fortunes for high-street retailers have been sad to watch.

However, the stark reality is that traditional methods of purchasing a whole host of content have become virtually obsolete.