No beaming for Laser as internet hotshots destroy its business model

While the technorati were at the Web Summit high-fiving their way to tendonitis, a Dublin retailing and cultural institution was in the process of closing down, destroyed by the internet.

News emerged last week that the end credits were rolling for the Laser video rental store on George's Street in the city centre, whose sister stores in Ranelagh and Andrew's Street shut last year.

There are probably black flags flying outside basement flats across Dublin. If you ever lived in the south of the city, especially as a student or wannabe-still-a-student, chances are you rented something from Laser. It was to the likes of Blockbuster what a farmers’ market is to Walmart. The stores were reassuringly scruffy, an essential look for a chain that attracted a cerebral set with penchants for arthouse movies, the classics and “world cinema”. The staff all seemed to have beards, though to be fair, so did many of the customers.

Nostalgia clearly had a role to play here, but Laser stores were genuinely enjoyable places to visit.

Like a panzer division of progress, the big online media companies have blasted the economics of their olde worlde counterparts into oblivion. If the impact of Netflix and its online brethren could drive Blockbuster and Xtra-vision over the edge, there would appear to have been little hope for a niche operation such as Laser.

Most of the population now has access to high-speed broadband of up to 100MB. Eircom last month announced plans to roll out a one gigabit service in selected locations around the country, while ESB and Vodafone recently got European approval for a similarly high-speed venture.

One gigabit is fast enough to download a high-definition movie in less than a minute, never mindstreaming it. The likes of UPC and Sky rent movies through their digital offerings. DVD rental stores don't stand a chance. Or do they?

New model

Xtra-vision was bought out of receivership last year by Hilco, the US investor that also picked

HMV

up off the floor. Hilco operates more than 90 Xtra-visions in

Ireland

, many cobranded with HMV. It recently posted sales of €48 million for seven months of last year, with operating profits of more than €3 million.

The thought may make Laser fans wretch, but Xtra-vision has also rolled out DVD vending machines in a number of Centra and Spar shops and reportedly plans to bring the concept to Britain next year.

And in the grand tradition of joining what you can’t beat, Xtra-vision is also planning an online movie streaming service. Blockbuster, too, survives in the digital world in this way. Most of Xtra-vision’s revenue presumably comes from sales instead of rentals, however. That’s how the business appears to be focused, looking at its website.

Sales were tangential to Laser – there is a limited market to buy 1960s Italian noir. For now, it is ploughing on with its closing-down sale and has paid its rent until the end of the month. Its manager told me it had already offloaded most of its world collection to Dublin City Library.

Is there no way Laser could adapt to the inevitabilities of the online world? Its stereotypical customer base is, after all, quite internet-savvy. The manager said it had been approached by someone with an idea for a streaming service, although the idea would seem unlikely to take off, given the chain doesn’t own the rights to the content.

Perhaps there could still be a sequel of some sort.