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What forces are the driving changes in the movie rental industry? Are the combined impacts of these driving forces likely to be favorable or unfavorable in term of their effects on competitive intensity and future industry profitability?

Several forces that are driving change in the movie rental industry are:

A. Limited Options: There are a limited number of available options which mainly consist or the small video stores, Blockbuster, Netflix and Red Box. Many renters are forced to choose from one of these. This I believe is favorable because this will help these companies control market share over video rentals.

B. Convenience: consumers are always looking for easier and more convenient ways to do things. With all movie rental industry competitors moving in the same direction, it will ensure that there are choices for everyone. With Netflix and Blockbuster making most movies available online, there is no need for inventory and inconvenience of running out of copies per movie

C. Economy: with many people that like to watch movies, but find going to a theatre to watch a movie too expensive, this is a cheap and easy alternative to view the movie. The only downside is waiting anywhere from 3 to 8 months for the movie to be available on DVD. As rentals are priced affordably, it makes renting an inexpensive alternative.

D. Changes in Lifestyle: As people mature, people will change the way they live. Some people will stay home more, and it goes hand in hand with watching a movie.