By RIC BLUM
The world is not coming to an end, but maybe DVD discs sales are starting to wind down.
DVD sales are dying around the country. I caution those of you with tons of used DVDs to be careful. Yes, there might still be a small market for new releases, maybe some box sets and a few Blu-rays, but the old stuff may be better served as drink coasters.
I’ve spoken with other pawnbrokers around the country and many agree — the physical DVD disc is old school. When it comes to video entertainment it may be going the way of the video tape, Laser Disc, the 8mm and 16mm movie reel.
After two years and three surgeries, I’m finally getting back into the swing of things and once again exercising on a very regular schedule, treadmill every morning and free weights almost every evening. (OK, they weren’t free, I had to buy them.)
Now, I’m not bragging here, but I try to get up every morning at 6 a.m. (except Sunday and holidays – on those days, usually around 8 a.m. – 9 a.m.) and hit the treadmill for three miles before breakfast (usually a protein shake). Shower, shave and I head off to work or wherever I am going.
For many years, I would “borrow” a few DVDs from work to watch during my morning workouts. I’ve watched hundreds and hundreds of DVDs good, bad and ugly — that means scratched and needed to be resurfaced. A movie would have to be pretty bad for me to not watch it, but there have been a few. Luckily, I have never fallen asleep during a movie while on the treadmill.
However, everything changed last year when I received a one-year subscription to Netflix from my son. Of course, I had to upgrade my older, used DVD player to a newer, used DVD player with Blu-ray, Full HD and more importantly, a built-in LAN. Glad to report since I work in a pawnshop it was not too difficult a task.
Wireless access wasn’t a must for me because my home network — modem, wireless router and switch — is located only two feet away from my workout DVD player and TV.
Now there are only a few out-of-pawn DVDs for me to borrow. I line up a dozen movies or a TV series in Netflix’s queue and I’m ready for a few weeks of viewing. (I typically spend 45-50 minutes a morning on the treadmill.)
Netflix, which was a DVD post-and-rental business, has gradually transitioned to streaming films on demand online in return for a monthly subscription – although there is a constant debate about exactly when and at what price films should be available.
Nevertheless, the direction of the market is clear: Netflix has nearly 23 million subscribers in the U.S., putting it on a par with Comcast, the largest cable company.
Do you think our customers are any different? (Well, yes in some ways, I think more may be couch potatoes than treadmill addicts.) Why buy a new or used DVD when you can watch an infinite number (well, maybe a finite number) of streaming movies and TV episodes over the Internet almost instantly?
OK, there will always be a few people out there who do not have Internet access, but this select group is probably not a large purchaser of your used DVDs.
Before it’s too late, this should bring up another change in the items we take in pawn – the DVD player. More and more of my customers are looking for DVD players with Blu-ray, Full HD, 1080p and with Netflix, Pandora, YouTube, Hulu Plus, Blockbuster and Facebook capabilities. And they also want these features to be on a DVD player with built-in Wireless LAN capabilities.
Smart TVs and TVs with built-in Wi-Fi – no DVD player necessary
And just when you learned how to plug up your DVD player and find the proper input selection button on your remote control (and more important – how to change it back to TV or cable or satellite), there’s a new technology on the market.
A funny thing about televisions, the new models seem to do more and cost less than their predecessors, all things considered.
The latest TVs are Smart TVs. These TVs will allow you to access the Internet directly without the need for a DVD player or other device. They either have an Ethernet jack on the back or connect to the Internet with built-in wireless connectivity or both.
These digital media receivers access videos, audio, photos and other content from Internet-connected apps optimized for your TV. And for those who do not have a Smart TV, there are Smart Set-Top boxes which will accomplish the same thing.
Whether you have a Smart TV or a Smart Set-Top box, you can easily get instant access to streaming movies, TV shows, videos and music on your HDTV and home audio system.
Many of them also let you view personal photo albums, read news and sports info, use social networking sites and much more, right on your HDTV.
Advanced smart set-top boxes have web browsers and may access content from any connected device on your home network, like your computer, and then send the content to a connected HDTV or home theater.
While connecting your smart set-top box directly to your router (hardwired) will provide the best streaming experience, almost all boxes come with built-in wireless connectivity.
For set-top boxes, an economic alternative to the DVD player with streaming capabilities is already on the market.
For example, the Netgear NeoTV Streaming Player (NTV200) lets you enjoy online entertainment with Internet apps for your TV. You can instantly watch movies and TV shows in HD and access a variety of TV apps including movies, games, music, and more, with built-in wireless for an easy Internet connection.
Some product highlights include:
• Reliable 1080p HD streaming from the network experts
• Stream YouTube, Netflix, Vudu, Hulu Plus and hundreds more channels
• Free iPhone, iPad and Android phone remote control app for easy navigation
• New content delivered to you every month
Then there is D-Link MovieNite Streaming player (DSM-310), which allows you to stream new movie releases the same day they come out on DVD with VUDU. Easy to set up and use, MovieNite provides instant access to unlimited entertainment choices from VUDU, Netflix, Pandora and YouTube right on your TV in full HD (1080p) quality.
Yes, you can still sell a nice, used basic DVD player with a remote control for $20 (more for higher end units) and a Blu-ray DVD player for $40 (more for higher end units), but for how long? The world is evolving and so is our customers’ tastes. They now want it all in their used, DVD player purchases – Blu-ray capability, online video streaming, built-in WiFi, 1080p HD and more. They also consider this when deciding whether to pick up their loan and pay the finance charges. But how long will this last?
I remember just the other day when we took in televisions with large picture tubes. We first started cutting out the ones which did not have built-in digital tuners when broadcast signals changed to digital. Next, we went to flat panel televisions only (with digital tuners – some early models only had analog tuners). My pawning customers had a fit when we stopped taking their older televisions, but I can’t fill my shelves with obsolete merchandise.
Of course the set-top digital converter boxes extended the life of analog tuner TVs and most still operated fine with a cable or satellite signal. This also created a new pawnable item (digital converter boxes).
I see a similar trend with DVD players. Our customers have been bringing them in to pawn or sell because they now have a new TV which has built-in Smart TV capabilities or a Smart TV Set-Top box and no longer use their DVD player.
Customers are also attempting to sell their DVD collections because they take up too much space. If they want to watch Rocky V for the fiftieth time, they’ll do so through on-line video connectivity.
You keep lowering the prices of your used DVDs and the number available for sale still increases. And you wonder why.
What’s more, movies and TV shows/series are coming to DVD faster than ever. The prices are lower. New releases are all on sale. There is a marketing ploy now to produce a 2-Disc DVD and Blu-ray combo pack. If retailers can’t make any money on individual sales, they’ll make it on volume.
Like so many other items in the past, pawnbrokers have been too slow in getting on board with the latest trends in technology. This is just another case where we need to be diligent and be ready to exit the market at the right time.
It might be time to re-evaluate your position on DVDs and DVD players. Cut back on loans, reduce the retail price, package them – 5 for $10, for example, dump them in lots on eBay.
The same considerations need to be considered with DVD players. How many do you have in stock (pawn)? Are they still selling (being redeemed)? Are they full-featured (internet ready) which may expand their life and salability for a while?
Are you seeing new set-top boxes being pawned? Or how about those Smart TVs? This may be the wave of the future.
We don’t always have to lead, but we really don’t want to be in last place either.
Ric Blum is a vice president of Ohio Loan Co.in Dayton, Ohio. He has served as president of the Ohio Pawnbrokers Association, secretary/treasurer of the National Pawnbrokers Association and as a member of the board of directors and the board of governors of the National Pawnbrokers Association. Please feel free to e-mail your to RicBlum@att.net or mail them to Ric Blum, Ohio Loan Co., Inc., 3028 Salem Ave., Dayton, OH 45406.