Tuesday, March 30, 2010

3. A Melancholic Movie Ending


One spring morning seven years ago, 25-year-old California-native John Bullock was walking around the highly populated and commercial West Village when all of a sudden he had a vision: he was going to open his own video store in this neighborhood. His goal was to combine his passion for movies and his desire to succeed in the city into one new and exciting business.

Two years later Bullock opened Cinema Classics, a small video store on Perry Street and 7th Avenue South, which offers the best classic movies of all times. “There are many movie aficionados in the Village area, so the store was quite a hit during its first couple of years,” Bullock says. Bullock, a movie aficionado himself, would spend hours talking to customers about his favorite directors such as Stanley Kubrick, Franz Capra, and Gus Van Sant.

Yet the current economic crisis, the intense competition with more economical movie services, such as Netflix and On Demand, and the ongoing movie piracy phenomenon, have all taken a toll in Bullock’s industry. After a severe decline in the store’s customer rate that accounted to an approximate 40% drop in its sales, the store can no longer afford its $5000 a month retail space in the West Village. It is scheduled to close this upcoming April. “It’s impressive how far piracy has gone,” Bullock says.

Victor Lewis, one of Cinema Classic’s old customers says about the store, “The actual selection of movies is solid if not out of this world. The problem with the store I feel is that it'll go out of business because there's too much competition around,” says Victor Lews, one of Cinema Classic’s oldest customers.

Not only small businesses are suffering from the economic crisis. Last year, we witnessed the closing of the Virgin Megastores. The store’s revenue declined from $230 million in 2002 to $170 million in 2009. Dean Christiansen, founding principal of Acacia Capitla, Inc., a New York City based corporate finance advisory firm, the emergence of legal paid movie downloads does not compensate the loss from illegal downloads. “Even though profitable movie download alternatives are becoming increasingly popular, the effect of movie piracy is still resulting in a significant loss of revenue, particularly for small businesses, who cannot afford to decrease the prices of their movies,” Christiansen says.

Free online movie sites have become increasingly popular in the past couple of years. Websites such as Watch-Movies, Project Free TV, and even YouTube provide a vast database of both vintage and contemporary movies that viewers can watch without downloading, spending money, or leaving their homes. According to the Motion Pictures Association of America (MCAA), 18% of online users in the US have illegally watched a full-length movie. Many people watch illegal movies on the Internet mainly because of economic reasons. Terrell Smith, movie fan and New School student says, “Yes. I watch pirated movies because I’d rather not spend the money,” Most students had similar reactions. Many perceived the movie industry as being overly rich and not truly suffering from online movie piracy.

Yet for small executive John Bullock, the illegal competition cost him his business. The average $20 sale price of the DVD’s in Cinema Classics cannot compete with the free illegal movie databases online. Bullock is reluctant about getting into details about his future career plans, yet he does plan to continue to offer the movies he has in stock through the store’s website. “I’ve made a good income doing what I do best for many years. It is now time for Cinema Classics to take a different path,” Bullock says. Above all, the hopeful owner refuses to believe that this will be the end of his esteemed company.

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