Australia’s video shop association is set to close – but can streaming keep up with demand for high quality video?

Australia’s national video shop association will reportedly wind up at the end of this month, but it’s still unclear what the country’s video viewing habits will look like in future.

According to the ABC, last week the board of the Australian Video Rental Retailers Association (AVRRA) decided to wind up the operation that has worked for years to promote and develop the video industry across the nation.

The board’s director Scott Dew has run the Family Videoland store in the regional Victorian city of Castlemaine for the past 11 years and has told the ABC his business will also close next month, citing the popularity of Netflix as a major contributing factor. In 2008, 600 or 700 rentals would be processed in the store on a typical weekend evening.

“It’s less than half now, so maybe 280 to 300 [and] that’s a combination of weekly, three-day hire, TV series and new releases,” Dew told the ABC.

The video shop association has long been wary of the role that streaming services could play in the eventual demise of actual store fronts.

In 2014 it wrote an open letter expressing concern that the launch of Netflix in Australia would not be “in line” with the digital content providers that already existed in the Australian market, and said that video store operators simply wanted a level playing field.

“As new content delivery solutions have evolved over the recent years, our members’ businesses have been placed under pressure by the introduction of digital content holdbacks,” AVVRA wrote.

An IBISWorld report highlights that between 2011 and 2016 the Australian video rental market lost 23% of its revenue and the capital intensive nature of the business model was making it increasingly difficult given Australians no longer tend to spend time browsing in local stores. According to figures cited by the ABC, there were approximately 2600 video rental stores operating in Australia in 2001, however, that number is now close to 750.

Marc C-Scott, a lecturer in screen media at Victoria University, says that the actual video store shopfront has been replaced by DVD rental vending machines and other automated rental options over the last several years.

Read more: Saying Goodbye to Presto: How Australia’s video streaming landscape became so complicated 

“The actual video shop has been gone for a little bit now,” he told SmartCompany.

But he says that the demand for renting high quality physical copies of screen media still exists, and consumers have a couple of major concerns that will need to be resolved before streaming really “takes off” as the dominant screening format in the country.

With good internet services a pre-requisite for a good streaming experience, he believes that across the country, consumers are waiting for strong NBN coverage. Many viewers are also still keen to watch cinematic quality programs at home, and there is a group of consumers who want to rent blu-ray editions of films.

“I think it was Sony earlier this year that released an ultra HD DVD player – they don’t see the market as diving anyway,” C-Scott says.

“There’s still people releasing ultra HD TVs. Streaming’s not at the point where you’re going to get that quality.”

It’s been an emotional time for video store clerks and owners across the country, with many lamenting the loss of social interaction that comes with visiting the local store on a weekend.

When Castlemaine’s Family Videoland announced its plans to close in September, customers posted affectionate memories of what the store contributed to the local community.

“Eight years you’ve provided some wonderful flicks for our date nights and kids special reward treat. It just won’t be the same without you,” one customer wrote directly to Dew and his team.

“You and your wonderful staff are SO terrific, and I’m sorry you’ve had to make this decision,” said another.

Mr Dew told the ABC yesterday one of the saddest things about the closure was this loss of interaction with the community.

But C-Scott says that the future of Australia’s viewing habits is far from certain.

The potential new fight is between Foxtel and Netflix, given Foxtel has access to sports streaming capabilities – an area that Netflix has never played in as seriously. That point of differentiation could see Foxtel creating different sports packages.

Earlier this month it was confirmed that Presto would be winding up on January 31 next year, with customers converted to Foxtel’s streaming service from February, after the cable TV network bought Seven West Media’s stake in the business.

“Foxtel has seen that video on demand is competing with them, so they’ve tried to lower their prices [for Foxtel Play],” C-Scott says.

“I think it’s really hard to work out who’s going to win,” he says.

The AVRRA will wind up on October 31. SmartCompany contacted the organisation and Dew but did not receive a response prior to publication.