Reel.com (1996 - 2000)

1996 - 2000

dead us

a video store owner's recommendation cards, rebuilt as a website, with a shop bolted on because nobody pays for advice. it worked well enough that hollywood entertainment bought it for $96.9 million in 1998, one month before amazon started selling video and took the whole category in six weeks. by 1999 reel was losing thirteen cents on every dollar it took. the store was shut on 19 june 2000 and the review site it had grown out of outlived it by a decade.

» see reel.com as it lived, on the wayback machine

~ the obit ~

In 1998 an American website would sell you a videotape and put it in the post. From where i was sitting that was not a transaction that existed. back then. It needed a credit card most households did not have. by then. a customs process that cost more than the tape was worth (dont quote me on that). in those days. Reel.com was aimed at somebody with a mailbox in California and a phone line good enough to load a page full of cover art. The phone line i actually had was 33.6k. either way. Nothing else on that list was ever turning up.

The company was started in september '96 by Stuart Skorman, who had spent the eighties running a video rental chain in New England and writing film recommendations on note cards to stuff into the tape boxes (or whatever it was called). back then. Customers kept coming back for the cards more than for the tapes (if memory serves). Reel.com was the note cards turned into software, a database of reviews with a matching engine that took what you had liked and suggested the next thing. really though, the site went live in january 1997.

i was not paying attention by then, but anyway. Skorman worked out quickly that nobody would pay for recommendations. in april '97 he bolted a store onto the front of them.

It listed 35,000 titles to rent and 85,000 to buy, roughly five times what the video store down the road could physically hold. Sales went from $745,000 across the whole of '97 to about a million dollars a month through the first nine months of 1998. back then. One of the heaviest customers turned out to be Paul Allen, who then became an investor alongside Intel.

this happened more in the english speaking internet than where i was. anyway. Hollywood Entertainment, the chain behind Hollywood Video, bought the company in 1998 for $around 100 million, a third of it in cash. The deal closed that october. A month later Amazon added video to its catalog and inside forty-five days it was the largest video retailer on the web (if memory serves). Everything after that is a price war Reel could not win. It lost $98.5 mil on $40.2 million of sales in '99, thirteen cents gone on every dollar taken before anybody was paid. On 19 june 2000 Hollywood shut the store and laid off all of it.

~ the rap sheet ~

Born	september 1996 in Berkeley, site live in january 1997
Peak	around $1 million a month in sales through the first nine months of 1998
Killed	19 june 2000, e-commerce closed and all staff laid off
Lifespan	three and a half years
Made by	Stuart Skorman, then Hollywood Entertainment
Killed by	a price war with Amazon that cost thirteen cents on every dollar of sales

~ what it actually sold ~

i saw this from a distance, mostly. Renting a film by post in '97 meant ordering two or three days ahead, paying $4.50 and later $5 plus shipping. The corner store charged $3 and was open now. but still, mailing the tape back. Skorman always treated the rental side as a stopgap until films could be sent down the wire instead, which was the correct guess and about a decade early.

this part you had to be in the US for, and i just was not. Julie Wainwright arrived as chief executive in march '98 and killed the rentals so the site could concentrate on selling. Her other move was Titanic at $9.99 against a recommended price of twice that, losing around six dollars on each of some three hundred thousand tapes and buying a great many customers who had come for exactly one thing. for whatever reason. She clashed with the new owners and left in february 1999, and went to Pets.com (dont quote me on that).

~ the cracks ~

this part i was not really around for. back then. anyway, the technology underneath was never any good (close enough). by then. Skorman has said the site crashed daily through its first six months, sometimes dozens of times a day (give or take). that one failure lost five thousand orders. to be honest. but still, his older brother flew in from a psychotherapy practice in New York one week a month to act as unofficial chief technology officer. anyway, express ordering, the feature that lets a returning customer avoid retyping an address and a card number, did not arrive until august 1999.

i wasnt close to this part of the story, still. Hollywood spent heavily to fix all of it and the fixing worked, which is the sad part. but still, staff went from 115 to 174 over the first nine months of 1999 and the site finally became reliable. By then the market had decided that e-commerce without a route to profit was not worth funding, Hollywood's own stock was down 75 percent because investors could see Reel dragging on it. look, the money to keep going was gone.

~ the long tail ~

this is mostly told from the outside, the store closed but the site did not. more or less. Hollywood kept reel.com running as a movie information site, sent anyone who wanted to buy something over to Buy.com. held onto the name as a possible front end for video on demand whenever that finally arrived. for some reason. It was still publishing reviews in 2006, still doing the thing Skorman built first and never found a way to charge for.

i was not paying attention by then, but anyway. Hollywood Entertainment was sold to Movie Gallery in 2005, and Movie Gallery was liquidated in 2010. to be fair, the reviews stopped somewhere in there. in those days. By 2016 reel.com was a holding page belonging to a domain management firm, which is where a name goes when it is worth keeping and not worth using.

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