The Beginning of the End of the Retailing of Content

By  |  Friday, April 10, 2009 at 4:27 pm

Virgin Megastore Going Out of Business

Here’s a picture which I snapped last week on San Francisco’s Market Street: A Virgin Megastore which, like all remaining U.S. locations, is going out of business–across the street from one of the largest Apple Stores, which seems to be doing okay. The Virgin store mostly sells content on shiny discs; the Apple Store mostly sells devices for consuming content, no shiny discs involved.

I remember looking forward to the opening of this Virgin location as the building that contains it went up in 1995. (Trivia: The other original tenant was that 1990s relic, Planet Hollywood.) Even then, the days of big music/movie stores like Virgin Megastores were beginning to come to an end: Amazon.com also opened its (online) doors in 1995. Virgin sold its wares at list price or close to it, as you might expect of a business that had to pay for tens of thousands of square feet of primo real estate in some of the country’s most prestigious shopping districts. Amazon, from the start, sold stuff at the sort of deep discounts that a company without any retail footage at all can manage.

Even last week, weeks into the Virgin store’s liquidation, it was a poster child for why the retailing of content is a business that’s winding down. DVDs and CDs had been marked down by thirty percent–a sharp cut by Virgin standards, but still far short of typical Amazon discounts. And Amazon will ship for free. Which makes the only compelling reason to buy at Virgin the pleasure of browsing items in a real store (which I confess I still like) and the elimination of having to wait for an Amazon box to show up on your doorstep.

But it’s not discs shipped out in Amazon boxes that will render Virgin and all of its physical-world competitors irrelevant long term–it’s downloads and streams of the sort that Apple and Amazon, among others, are doing a job of embracing. It’s just going to be a few years until there are essentially no music and movie stores left except for independent ones that soldier on for reasons that go beyond mere profit. (The Bay Area is fortunate to have both Amoeba and Rasputin–long may they wave.)

Bookstores are going to take longer to vanish, but they’re going to get hit hard too, I’m sure. I’m not ready for e-readers to take over, but if there are still two nationwide book-centric merchants with gigantic stores in 2019, I’ll be surprised. I’m also assuming video game stores will be part of history by then, as will in-person DVD rental (hey, it’s not clear Blockbuster will make it to 2010). And as for good old fashioned newsstands? Well, I still like ‘em, but they already give me a plessantly nostalgic feel.

Let’s end this with a T-Poll:

 
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16 Comments For This Post

  1. Tom B Says:

    I still like shiny discs– for music– simply because I like so MUCH music, I’d need a whopping big hard drive to store it all (at CD quality). I seem to be in a minority, though. Part of the trouble may be the drek the music idustry spews out (Brittney Spears; any artist whose name involves initial or “big” or “Puff”). But, that’s probably wrong, because Blockbuster (Video stores), etc. aren’t doing well, either.

  2. Josh Rose Says:

    It’s funny you raise this today: I had a $20 Best Buy Reward Zone coupon to spend, and after perusing the store for about an hour looking for something to buy, I ended up getting a card for some Zune Points to purchase content online. I just couldn’t bring myself to buy something on actual “shiny” media to bring home. I also have gotten in the habit of carrying my Kindle into bookstores to see if a book I find interesting is available in the Kindle Store, before even thinking of buying it in the wood pulp version.

  3. Mark Mayerson Says:

    The one thing that Amazon doesn’t have is the digital equivalent of browsing. They do point you to similar books, but they don’t have a virtual shelf full of new releases based on subject matter that’s as compressed as a real bookshelf. If they came up with a virtual floor plan, where you could point and click to get to the sections you’re interested in and then present you with the new books on “shelves,” I might not even miss real browsing. They do have lists put together by users suggesting material based on subject, but they need virtual managers who would mirror how shelves at airport bookstores, indie bookstores, etc. are stocked. If they ever figure that out, bookstores will quickly become redundant.

  4. matthias Says:

    Re: blockbuster. I wouldn’t be devastated if BB died, I just would need a viable online alternative where movies are released at the earliest time, not a month later! Browsing through iTunes or amazon for rentals is always like scanning through a list of movies I’ve already seen!

  5. Jared Newman Says:

    2019 might be a safe bet, but video game stores will definitely take longer to die than the rest because it hasn’t fully embraced digital distribution yet.

    There’s VOD and streaming, and there are digital music downloads, but console games must still be purchased on a disc. We’ll have to wait until at least the next console generation to see significant change on that front.

    As for ordering online, it’s okay with games, but like other media the immediacy of a store purchase is nice. Retailers still emphasize this with midnight launches for the biggest games. And unless your taste in gaming is super obscure (Japanese imports and the like), you won’t have much trouble finding what you need at GameStop or Best Buy.

  6. Karen K. Says:

    Book stores will not vanish. There is no substitute for browsing a bookstore and buying a copy right there. E-books have their place but nothing beats a physical book to touch, page through and read. I like to be able to pick the best copy to buy.

  7. pond Says:

    Harry, how are we supposed to vote for ‘none’ if you don’t give us that choice and the code requires a choice?

    I put some nonsense into ‘other’ and got to vote, but ‘other’ is not the same as ‘none’ and it would be nice to separate out that choice — above all since you offer us in the text that choice.

  8. dale johnson Says:

    I was forced to go to Barnes and Noble this wekeend for a book (I hate book stores) and I dont seethem going down soon. Had to wait for a parking spot, when i finally got between people to find the book, i waited about 25 mins (About 35th) in line to check out. This is not a company in trouble. 1 book, 1 hour back to amazon i go.

  9. Tom Foremski Says:

    Here is my April 7 reaction to Virgin closing:)

    Apples To Oranges: Virgin Megastore Closing http://bit.ly/HQGG

    I covered the opening of the Apple’s San Francisco retail store in February, 2004. It was Apple’s seventh store and its first flagship store, the first to feature a very modern design.

    The building was a minimalist cube and inside were two floors of stunning decor and a centerpiece glass staircase. We were told Steve Jobs was involved in every aspect of the design, down to choosing the seats in the upstairs theater.

    It was impressive, but what was more striking to me was its location: Across the street sat a huge Virgin Megastore, 6 floors of music and movies.

    Megastore. It sounded so 1980s. Two floors versus six floors. It was an apt metaphor for the changing landscape in commerce.

    I walked past the San Francisco Virgin Megastore yesterday and it was festooned with colorful banners. It’s closing. A mega sale at the megastore. I pulled out my iPhone and snapped a picture.

  10. Edward Sullivan Says:

    …and one really big EMF pulse, and all the billions of $ worth of content in millions of iPods and iPhones and Zunes and Storms and Kindles is blown straight to Entropy…

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