This morning, while perusing Gizmodo I came upon this video from the Onion, embedded above. The video entitled “Historic ‘Blockbuster’ Store Offers Glimpse Of How Movies Were Rented In the Past” is funny because it’s so poignant. With online rentals that come in the mail from Netflix (and even Blockbuster itself) and with downloadable rentals from services like iTunes and Vongo, who on earth wants to rent videos off a shelf? It’s hard to imagine this antiquated business model continuing for long, and yet Blockbuster appears to be doing well enough to purchase Circuit City. Within a few years, though, retail video rental will go the way of the Fotomat, and no one will miss it. This got me wondering: What other business models are about to be displaced by technology?
- Music Stores: This is really a no-brainer. Even if you agree that the CD itself is still a viable format, nobody sane is going to pay the rip-off prices charged at your typical mall record store. A visit to the Virgin Megastore here in New York shows new releases costing sometimes upwards of $20 when the same CDs are available online from Amazon for several dollars less.
- Radio Shack: The Onion similarly covered Radio Shack, attributing a fake quote to the store’s CEO: “Every location is full of bizarre adapters, random chargers, and old boom boxes, and some sales guy is constantly hovering over you. It’s like walking into your grandpa’s basement. You always expect to see something cool, but it never delivers.” I guess people really need their wires and soldering tools in a hurry.
- Travel Agents: With a host of online booking sites that offer great prices and user reviews, why on Earth would you want to go to talk to a salesman, who may or may not give you a good deal in the end?
- Stock Brokers: First, they talk you into buying some stock they’re trying to hype; then they take a huge commission when you take their “advice.”
- Auto Dealers: Unfortunately, there’s plenty of life left in this business, because so many car dealerships are still mom and pop businesses. You’ll always need to go to a brick and mortar car dealer to test-drive a vehicle, but with sites like Cars.com, we have hope that the days of haggling with sleazy car salesmen will soon come to an end.
- Real Estate Agents: Steven D. Levitt famously outed real estate agents in Freakonomics, showing that the average agent sells his/her own home for a higher price than yours. That 6% commission gives you something to chew on.
- Brick & Mortar Computer Stores: I’m actually sad that CompUSA closed its doors, because it was quite possibly the one place that you could run out and, for an incredibly overpriced amount, buy a computer part like a hard drive cable right away—never mind that the selection was awful (and the prices were almost double what you’d pay online). You could get instant gratification. However, it’s unsurprising that most people stick with the big-box retailers like Best Buy or purchase systems online for much cheaper.