Film critic Roger Ebert wrote an interesting article a couple days ago (Dec. 28) about "Why movie revenue is dropping..." The article sheds some light on the effect that online streaming services like Netflix have had on consumers' tendency to watch movies at the theater.
What's relevant here for wireless retailers is the importance of the in-person/in-store experience, particularly when competing with lower-priced online offerings (see Amazon).
To increase foot traffic and profits, movie theaters (like retailers) have to focus on what makes the in-person experience worthwhile and what the online experience is missing:
- The theater experience. "Moviegoers above 30 are weary of noisy fanboys and girls," Ebert writes. "The annoyance of talkers has been joined by the plague of cell-phone users, whose bright screens are a distraction. Worse, some texting addicts get mad when told they can't use their cell phones. A theater is reportedly opening which will allow and even bless cell phone usage, although that may be an apocryphal story." (This latter part is good for wireless retailers, of course.)
- Competition from other forms of delivery. "Movies streaming over the internet are no longer a sci-fi fantasy. TV screens are growing larger and cheaper. Consumers are finding devices that easily play internet movies through TV sets. Netflix alone accounts for 30% of all internet traffic in the evening. That represents millions of moviegoers. They're simply not in a theater. This could be seen as an argument about why newspapers and their readers need movie critics more than ever; the number of choices can be baffling."
- Lack of choice. "Box-office tracking shows that the bright spot in 2011 was the performance of indie, foreign or documentary films," Ebert writes. (Likewise, wireless retailers need to ensure they offer customers as much product choice as possible, to stay competitive.)
The take home message is clear: Any brick-and-mortar business that competes with an online delivery channel has to look itself in the mirror and decide how its in-store experience can provide value to customers. This value can be in the form of enjoyment, entertainment, information, customer service, the ability to touch-and-feel a given product, human interaction -- whatever. But the value needs to be significant enough for people to not only come back, but to tell their friends and family to go and buy from there as well.