Blue Ocean Strategy
for Renting of video tapes and disks (ISIC 7722)
The 'Renting of video tapes and disks' industry is facing extreme market obsolescence and substitution (MD01: 4, MD08: 5), with its traditional business model largely defunct due to digital alternatives. A Blue Ocean Strategy is highly fitting and necessary because continuing to compete in the 'red...
Strategic Overview
The 'Renting of video tapes and disks' industry is in a state of severe decline, characterized by market obsolescence and substitution risk (MD01: 4), disintermediation by digital platforms (MD05: 5), and an inability to compete with subscription models (MD03: 3). The traditional 'red ocean' of physical media rental is now largely a barren landscape, with intense competition from streaming services rendering its core value proposition irrelevant. This dire situation necessitates a radical strategic shift, making a Blue Ocean Strategy not just an option, but a critical imperative for any residual players seeking to survive or thrive.
A Blue Ocean Strategy offers a pathway out of this competitive struggle by focusing on value innovation—creating new, uncontested market spaces. For this industry, it means fundamentally rethinking the 'job to be done' for customers beyond mere content access, which is now commoditized. Instead of competing on price or convenience with streaming giants, the strategy involves identifying unique value propositions that leverage existing (though currently devalued) assets like physical content libraries, localized presence, or a deep understanding of film curation, and transforming them into entirely new offerings.
This approach requires a significant pivot, moving away from the direct rental model towards creating unique experiences, niche offerings, or community-based services that streaming platforms cannot easily replicate. It demands creativity in redefining customer value, exploring adjacent markets, and potentially combining physical and digital elements in novel ways, thereby rendering the traditional competition irrelevant and opening up new avenues for revenue and growth.
4 strategic insights for this industry
Obsolescence Demands Radical Reimagination
The industry's core product (physical media rental) is fundamentally obsolete due to technological shifts (IN02: 5) and market substitution (MD01: 4, MD03: 3). A Blue Ocean Strategy must entirely bypass direct competition with streaming by defining a new value curve, rather than trying to optimize a dying model. This means focusing on unique aspects like rarity, curation, community, or physical experience.
Leveraging Devalued Assets as Unique Capabilities
Existing physical assets (vast content libraries, physical store locations) are currently liabilities (MD01: Devaluation of Physical Assets & Infrastructure). However, they can be re-envisioned as unique enablers for new value propositions. For example, rare physical copies or community spaces offer experiences streaming cannot, forming the basis for uncontested market space.
Shift from 'Rental' to 'Experiential or Niche Content Hub'
The 'job to be done' by customers has evolved from simply 'accessing movies' to 'experiencing content' or 'discovering niche interests'. A blue ocean approach for this industry means creating offerings centered around film culture, niche genres, exclusive physical media, or community gatherings that capitalize on human connection and curation, making the competition (streaming services) irrelevant to these new customer needs.
Opportunity for Value Innovation in Curation and Scarcity
While streaming offers breadth, it often lacks depth in specific niche areas, or physical artifacts. There's an opportunity to create value by meticulously curating rare, cult, or out-of-print titles, offering exclusive physical releases, or providing expert-led discovery journeys that are difficult to replicate at scale by algorithms alone. This addresses the lack of differentiation in the existing market (MD07: 4).
Prioritized actions for this industry
Transform physical locations into 'Film Culture Hubs' or 'Experiential Movie Boutiques'.
Instead of rental outlets, these spaces would offer curated retail (limited edition physical media, merchandise), small-scale screenings, film discussion groups, or even themed cafes. This leverages existing physical assets (MD01: Devaluation of Physical Assets & Infrastructure) to create a unique social and cultural experience, moving beyond commoditized content access and into 'experience' creation, which streaming cannot replicate.
Launch a 'Curated Niche Physical Media Subscription Service'.
Focus on delivering rare, cult, arthouse, or limited-edition physical media (e.g., Blu-rays, 4K UHDs) to a dedicated collector audience, often bundled with exclusive digital content or critical analysis. This taps into a premium segment willing to pay for scarcity and quality that streaming doesn't offer, creating a new market space based on connoisseurship rather than convenience.
Develop and monetize a proprietary 'Retro Film Archive & Preservation' initiative.
Leverage existing physical libraries, or acquire unique archives, to digitize, restore, and offer access to rare or historically significant films that are not available elsewhere, potentially with academic or educational partners. This establishes a unique intellectual property and content asset, creating value in scarcity and cultural preservation.
Pioneer 'Hyper-Local Community Content Creation & Distribution'.
Partner with local filmmakers, artists, and community organizations to produce and distribute ultra-local content, using former rental infrastructure (e.g., physical stores) as production hubs or unique screening venues. This creates highly relevant, geographically specific 'blue ocean' content and community engagement that global streaming services cannot replicate.
From quick wins to long-term transformation
- Host one-off themed movie nights or film history talks at existing locations to gauge community interest in experiential offerings.
- Curate a small 'collector's corner' of rare physical media for sale (not rent) within an existing store or online platform.
- Launch a blog or social media presence focused on film curation and niche genres to build an engaged audience.
- Pilot a dedicated 'Film Hub' in a re-purposed store, offering a cafe, screening area, and retail for curated media.
- Develop a minimum viable product (MVP) for a subscription box service for niche physical media, targeting film enthusiasts.
- Form partnerships with local universities or film schools for collaborative projects or archive access.
- Scale the most successful 'Film Hub' or subscription models into a national brand, potentially with franchising.
- Establish a recognized 'Film Preservation Institute' or digital archive that generates revenue through licensing or exclusive access.
- Invest in original niche content production based on identified 'blue ocean' market gaps.
- Failing to truly differentiate and merely offering a slightly altered version of existing 'red ocean' services.
- Underestimating the capital required for reinvention and clinging to legacy assets that do not support the new value curve.
- Ignoring market research and customer needs, assuming 'build it and they will come' without validation.
- Lack of digital marketing and e-commerce capabilities to reach new, dispersed niche audiences.
Measuring strategic progress
| Metric | Description | Target Benchmark |
|---|---|---|
| New Market Revenue Share | Percentage of total revenue derived from newly created market spaces or products, indicating successful blue ocean creation. | >50% within 5 years |
| Customer Acquisition Cost (CAC) for New Offerings | Cost to acquire a customer for new blue ocean products/services, reflecting marketing efficiency in new markets. | <$50 per customer |
| Customer Lifetime Value (CLV) for Niche Subscriptions/Experiences | Average revenue generated from a customer over their engagement period with new offerings, indicating long-term value. | >3x CAC |
| Engagement Rate for Experiential Offerings | Attendance rates for events, community participation, or time spent in physical hubs, measuring the success of experiential value. | 70% event capacity / 10% community forum activity |
Other strategy analyses for Renting of video tapes and disks
Also see: Blue Ocean Strategy Framework