Field Notes Inside an Integrated Communications Agency

A new entertainment blockbuster was released everywhere on April 29th.   The media was all over its release with stories, reviews, and commentary.  Fans lined up in droves the day before to be the first to experience it.  After the first day, the blockbuster had raked in hundreds of millions of dollars in sales.  

What caused all this stir?  Was this the new Indiana Jones movie?  Or maybe the latest Rolling Stones tour?  No, the blockbuster in question was Rockstar Games latest release, Grand Theft Auto IV (GTA).  That's right - a video game.  Welcome to the 21st century, where movies, television shows, and concert tours compete with console-based video games.  Games give an added dimension in that they incorporate these other forms of entertainment and then give the user the ability to control them.  Witness the popular Guitar Hero video game which is like rock concert except you are the one playing.  Or GTA itself, which is highly cinematic in its lighting and camera angles so it feels like you are moving around inside a movie.  

While the target demographics may be narrow for such titles as GTA, the profit margins are anything but.  The game sold 3.6 million copies on its first day which translated into $310 million in sales.  By the end of the first week 6 million units had sold for a total of $500 million in sales.  The movie release of "Iron Man" that very same weekend generated a mere $104 million at the box office.  GTA's numbers smash the income garnered from most Hollywood films during their entire theatrical release.

GTA reportedly cost about $100 million to produce.  Compare this to Spiderman III ($258 million) and even Titanic ($200 million in 1997 dollars), and the video game is starting to look like a bargain that generates huge profit margins.   With this kind of consumer anticipation, media fenzy, and return on investment, video games have come of age.  No longer are they the second cousin or a nickel and dime industry.  Monetarily, video games have arrived and will be a permanent part of the entertainment landscape for decades to come.

It was announced today that troubled movie renter Blockbuster offered to buy troubled gadget seller Circuit City.

Never mind that analysts are scratching their heads on the economics, I’m intrigued that this signals a rapidly approaching new era of on-demand cocooning. This is just another sign of change that Blockbuster started twenty years ago.

I grew up in Raleigh with only a handful of big movie houses. One was The Cardinal Theatre. With two huge screens, great concessions and midnight showings every weekend, it was always packed. Sometime around the early 1990s, The Cardinal Theatre was replaced with…wait for it…a Blockbuster. It’s sadly ironic isn’t it? After all Faith Popcorn told us cocooning was the new wave back in the 90s.

My, how things progress. “The deal is a sign that Blockbuster doesn't have confidence in the retail video rental business anymore, says Shahid Khan, a partner at IBB Consulting. The movie rental store business is officially dead.”

The Blockbuster that replaced The Cardinal was closed a few years ago when the chain began facing online competition.

If designed correctly, the merger could result in a new customer experience for both companies. The new “CityBlock” or “CircuitBuster” has a chance to reinvent itself in a way that satisfies the entertainment buff in everyone. I just hope they understand that today’s retail environment HAS to be about the experience. Customers have easy online alternatives.