The Netflix Invasion: Has the time come to buy gravestones for our local video stores?

One month away from the shuttering of his Rent-A-Flick video rental store, Amir Sharafali reflects on the industry shift.

“The movie business will always be around; it’s just the way we watch them that is changing.”

A statement littered with a bitter truth, at least for Amir and other small video shops. They’re seeing steady drops in business because of competition they simply can’t beat. From downloading movies through Apple’s iTunes e-store, to subscription-based mail-order DVD services, the higher-tech options are taking over.

netflixNetflix’s looming entry onto Canadian soil has proved itself a doomsday scenario for many in the business – Amir being one of them. In an interview for an article in the Financial Post, he suggests closing Rent-A-Flick is him “getting out the at right time.” He shuts his doors just before Netflix is expected to open theirs. The implication that these on-demand video streamers and digital renters are directly impacting local stores is evident, if not overtly obvious.

While Amir’s 16-year-old store closing doors forever may be an extreme case, even industry giants are taking clear precautions: Rogers Communications, for example, recently cut back its services in anticipation of the Netflix Invasion.

HMV is another big-name example: their struggles have been obvious, and their strategy changes many as they attempt to adapt to a rapidly altering climate.

The U.S. is, by almost all measurable metrics, considerably more into on-demand video renting and purchasing than it’s Northern neighbour. But the trends remain the same: on-demand is in-demand, and the demand is growing steadily – if not exponentially.

How, and if, physically based video rental shops can stay afloat remains to be seen. But Netflix and its kin are casting some very dark shadows.