Business news this month includes a receivership, a store’s closure and an acquisition that all underscore quality content’s enduring value as media platforms and delivery methods evolve.
Brian Bosworth and Graham Peat announced May 5 their plans to close their iconic 28-year-old Kitsilano video store Videomatica this summer because fewer people are watching movies on DVDs.
Their news came the same day that Blockbuster Canada executives announced that their 400-store video-rental chain was in receivership and that Grant Thornton Ltd. seeks to sell its assets. Six days later, New York-based Apollo Global Management LLC announced plans to acquire CKX Inc. (Nasdaq:CKXE), which owns the producer of American Idol and So You Think You Can Dance (19 Entertainment) as well as the name and likeness of Elvis Presley.
Apollo’s US$509 million takeover offer was 23% above the stock price of CKX, which stands for “content is king.”
It was also a vote of confidence in CKX founder Robert Sillerman’s guiding principle that quality content is the best media investment.
Philanthropist and department-store heir Yosef Wosk told Business in Vancouver that he would contribute $100,000 to ensure that Videomatica’s 30,000-film inventory of DVDs and videotapes remains intact, either:
- with the Vancouver International Film Festival (VIFF);
- at an academic institution such as the University of British Columbia, Simon Fraser University or Capilano University; or
- at a new British Columbia Film Archive.
Bosworth lamented that only a small fraction of the $750,000 that his store spent on inventory would likely be recouped in a massive clearance sale.
Bosworth also invested tens of thousands of dollars in his website, which has a database that enables users to find films.
Discussions Bosworth, Peat and Wosk had with the Vancouver Public Library went sideways largely because it would cost the unionized library $20 or more to catalogue each item.
Bosworth considered recording each of his films onto a server so that customers could stream them to their computers. But the cost would be exorbitant.
A bigger obstacle, Bosworth said, was that he would not have the legal right to rent the films via streaming video.
He only has the right to rent the videos in the format in which he bought them.
“Rights issues would have been a big problem. That part of the world’s business is taken over by the Googles and Apples – studios are all circling around figuring out how to do this,” said Bosworth, who is 58 and will soon be in an unwanted semi-retirement.
Videomatica was an early adopter of allowing customers to rent DVDs by mail.
That business enjoyed initial success, but it has recently been hard-hit by the rise of video-on-demand.
“There’s a dirty little secret out there. Canada Post is not the service it used to be,” Bosworth said.
“They closed down their Victoria sorting station and dumped that work on Vancouver. So, the service is nowhere near as good as it was.”
The ineffectiveness of using publicly funded Canada Post as a content-delivery method also became clear in February when the BC Liberals were unable to get personal identification numbers to party members in time for them to vote in the party’s leadership race.
Canada Post effectiveness could suffer another black eye if the Canadian Union of Postal Employees strikes later this month, as organizers have been threatening.