Stories about business ventures that have been suffering from the consequences of rising inflation, shortages in foreign currency, restrictive government policies, the slowed economy due to the Novel Coronavirus (COVID-19) pandemic, and political instability have become ordinary in these trying times. Though a couple of the phenomena mentioned above might also apply to Trios Movie Centre, this particular business is losing out mostly because of the rapidity with which internet use is growing and technology is evolving, an ironic situation when one considers that this was the factor behind its establishment and earlier success.

"Considering how the business struggled to cover our monthly expenses, it looks like this is the last time I am going to pay the rent for my movie shop," said Binyam Habtamu, one of the owners of Trios Movie Centre, which was established as an internet cafe eight years ago by three brothers and later shifted to selling movies to customers by uploading them to flash drives due to a growing demand for Western films.

"We provide anything from series, feature movies, reality shows, documentaries, to audiobooks and educational books," Binyam told Fortune. Things went well for them. The rental business, which had started out with a 60,000 Br loan from Addis Credit and Saving S.C., a microfinance institution, opened another branch in the second year of operation. Currently, Trios operates four branches across Addis Abeba and is still being run by the brothers and their sister, Rahel Habtamu.

The owners pay between 6,000 Br and 8,000 Br a month in rent for each of their locations, an amount that presented no great difficulty in the past. Now, things are looking a little grim for the family business as many of their customers begin to turn to the internet and streaming services for their movies and entertainment.

In this fast-changing world, it is inevitable that old technologies become obsolete and make way for new developments and, likewise, the film and music industry has been witness to tremendous medium and market changes as a result of technological shifts.

The movie-rental industry is far from new in Ethiopia. A couple of decades ago, there were shops all over the capital renting out movies on VHS cassette tapes. The VHS tapes were slowly replaced by DVDs and VCDs in the early and mid-2000s, which in turn were edged out by places like Trios that offered a more convenient method for movie-lovers to get their fix. Namely, in the way of digital files on a tiny flash drive, which customers do not have to worry about returning.

Trios used to make 1,000 Br a day on average, according to Binyam, and its income reached as high as 5,000 Br a day last year when businesses and schools were closed down due to the COVID-19 pandemic, a situation which has led to a contraction of Ethiopia's GDP growth from an earlier projection of nine to six percent despite bringing along opportunities for some. Internet shutdowns also often led to a spike in business as people did not have other means to entertain themselves with, Binyam observes.

"Now the income at each branch has reduced and sometimes goes as low as 300 Br a day," he lamented. Binyam believes, quite rightly, that cheaper internet access and proliferating movie streaming services are the cause of his woes. There were 3.6 million internet users in 2013, and by the end of 2020, the figure stood at 23.5 million, according to Ethio telecom.

Trios Movie Centre has 30 terabytes of movies and employs up to four people at every branch, also providing the occasional gig to freelancers. Regardless of its vast library, it seems that with the advent of streaming and improved access to high-speed internet, Trios and other businesses like it are faced with much the same fate that met the VHS and DVD rental market in the not-so-distant past.

This story is not new, and the owners of businesses like Trios might be interested in taking a look at how a similar cycle played out in the US just over a decade ago. Netflix, an American company that had started out as a DVD rental service in 1997, made the move to begin a subscription streaming platform in 2007. The pioneering company now streams and produces its own TV shows, movies and documentaries in more than 30 languages and 190 countries. It has 204 million subscribers worldwide and generated 24.99 billion dollars last year.

"When this [rental] business first started in Ethiopia, it was driving cinemas out of business now their turn has come and they're being replaced by streaming services," said Markos Lemma, co-founder, and CEO of Iceaddis, an innovation hub & tech startup incubator. According to Markos, it was clear that an unsustainable business like selling movies on flash drives would not last. Binyam concurs.

"We started the business knowing that it'll phase out eventually," he told Fortune.

While there is no payment system set up to subscribes directly from Ethiopia, people use Netflix accounts opened in other countries. However, there are people here and there that sell Netflix accounts for payment. On platforms like Telegram, for example, one can find passwords to Netflix accounts sold for as little as 250 Br a month, according to users.

That is not the only streaming service that is available to Ethiopians now. Some have taken heed of Netflix's success, and a similar trend is playing out in the country as new music and film streaming services providers start to emerge. Some sites in the movie market are Sodere, Avetol, and habeshaview.

Habeshaview aims to take the Ethiopian movie experience to the internet and change it into a profitable business. According to Tigist Kebede, operational director of the streaming company, it was established in 2015 to connect diaspora communities around the world, which are estimated to be three million, mostly concentrated in North America, Europe, and the Middle East.

One of the challenges in the business was and still is convincing subscribers to pay a subscription fee to watch Ethiopian films, according to her.