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Strategies & Market Trends : Value Investing

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To: MCsweet who wrote (10268)4/1/2000 9:00:00 PM
From: Wright Sullivan  Read Replies (1) of 78536
 
MC-

Thanks for posting about video rental outfits. This isn't a private club and your posts are clearly value oriented and appreciated.

My opinion: These cigar butts still have a few good puffs left.

I disagree with those who see video rental being displaced by Video-On-Demand "in the next few years."

Yes, video stores are "an archaic method of distribution of electronic content." But so are books! Yes, video stores will disappear in about ten years. But "in the next few"?

In Thursday's Wall St. Journal, Walter Mossberg's "Personal Technology" column describes the trials and travails he went through to get a DSL line. And what are the results? "Videos of news events or movie previews, while still not as quick or smooth as actual TV, are now at least watchable." Hmmm, and that's DSL, about the best you can get at home today.

Yes, things will improve drastically over the next few years. FTTH (fiber to the home) will eventually give us the truly fat pipes that all these business models are counting on. But when will that happen? No time really soon.

And your point, MC, about rural locations of MOVI is quite valid. My home is "out in the sticks", about fifteen miles outside a small metro area (maybe 300,000 people in the two nearby small cities). I can't get DSL. I have little hope of getting DSL in next couple years. No cable either (and Video-on-Demand over cable will take some more technical breakthroughs).

Except for pay-per-view, I don't see our trips to "the movie store" ending any time soon. They'll make a killing on our late fees for years to come. And the kids love to "test drive" video games at Blockbuster before buying them over the internet.

Just my opinion, and always appreciate the views on this board. But I think you're on to something here. The death notices are being issued a bit prematurely.

Glad you brought these to our attention.

-Wright
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