This past week while watching television, I noticed a commercial that I found to be totally incomprehensible. Back in the 1980’s, it was very common to go to a video store, rent a number of movies (usually new releases) and return them the next day. JVC’s VHS had defeated Sony’s Beta during the era not because it was a better product but due to their marketing efforts. Even in the 1990’s renting videos was a very popular notion because in my opinion the idea of watching movies will never go away.
With technological advances, all of us have seen the CD and DVD revolution take hold along with the demise of analog signals being replaced by digital communication. Today, even these recent improvements are being replaced by online streaming with MP3s and online demand for new movies accessible at your fingertips. DVD’s now represent something which is fading into history!
For that very reason, I was completely astonished to see a commercial for a company selling a DVD kiosks business whereby people would go and rent a DVD and return it sometime later. In this world of instant communication, I do not see how a company can survive in the next 10 years using an antiquated business model. Blockbusters collapse is proof of that.
When purchasing a piece of real estate, one should watch if the indicators are positive. What I mean by that is if a Walmart, Starbucks, Subway or other business is moving into an area. Seeing one of these come in is encouraging, having two is very positive and all three is a virtual guarantee that an area will do well long term. Conversely, having one, two or three move out is a negative indicator for the long term economics of an area.
Whether it is real estate, technology or other business venture, it is important to see where the future is trending to and not the past.