OTT and VOD lead to decline in video rentals in Chile

Juan Fernandez Gonzalez | 08-11-2013

Over-the-top (OTT) and video-on-demand (VOD) competition is driving traditional video stores to closure in Chile. First was Bazuca, which announced that it will stop its renting activity to focus on streaming, and then this week Blockbuster announced it would close most of its physical shops in the country.

According to Chile's media, the website Bazuca, which offers subscriptions for renting and delivering movies to the home, sent letters to its customers informing them about the coming closure of the service.

By the end of the month, the popular platform expects to have completely ceased its physical DVD renting business to focus on VOD streaming for computers. Bazuca is also working through different platforms including Smart TVs, smartphones and tablets.

While other OTT services such as Netflix are expanding quickly, traditional services seem to be unable to face the competition. This has led to Blockbuster announcing, as it did in the US this week and in several countries over the last few years, that it will drastically reduce its operations in Chile.

According to El Mercurio, the video store chain plans to keep only two shops in the whole country, and these will close within 12 months. Two years ago, Blockbuster had over 50 shops in Chile; these were reduced to 31 at beginning of 2013. During this year, 20 other stores have closed and now the company has announced it will close nine more, keeping only those in La Dehesa and Alto Las Condes, both in Santiago's metropolitan area.