Just as the web-and-mail video rental business model of Netflix spelled doom for Blockbuster’s bricks-and-mortar outlets, it was only a matter of time before Sean Morgan’s introduction of the real-time TV monitoring business Critical Mention forced the once-dominant VMS into extinction.

It took eight years.

The death of Video Monitoring Services of America LP, a firm that once employed more than 1,000 people and generated sales of more than $50 million, was etched on the www.vmsinfo.com web site Friday like a gravestone inscription:

The VMS Board with the input of qualified professionals have elected to close VMS.

Unfortunately almost all VMS personnel have been terminated effective today.

The decision has been made after exhaustively evaluating many different options and with sadness for our loyal staff and customers.

At some point in the very near future a Trustee will be appointed to liquidate VMS. We anticipate the trustee will make future communications with customers.

VMS thanks all customers for their loyal support.

For those of us in the PR services sector, it was apparent VMS would be toast when Critical Mention launched a platform delivering real-time email alerts that not only informed clients when their key words were heard on television, but also allowed subscribers to view the video clips instantly.

While VMS management scrambled to save their burning house, Morgan, the Critical Mention CEO, went on an R&D offensive and offered update after update to his software and an expanded trove of content that today includes every major U.S. over-the-air market, cable and satellite TV programming, as well as many foreign sources, and even web video from online news sites.

There is no shortage of entrepreneurs, like Morgan, who are licking their chops over the prospect of disrupting other legacy players in the billion-dollar PR services sector.

But why haven’t they declared victory?

In upcoming posts, we’ll take a look at the disruptors in four segments of the services market: Distribution, Targeting, Monitoring and SaaS (software as a service).

Next week: Distribution

Services like Marketwire, PRWeb, PitchEngine, GlobeNewswire and Hugin Online have had an impact on the legacy market leaders PR Newswire and Business Wire.  We’ll dig in to see who is growing and why.

(Disclaimer:  The vast majority of my career has been spent in PR services.  My only current role in the distribution arena is as adviser to PitchEngine. The views expressed here are my own.)

Today’s introduction of a new automated evaluation tool by London-based Lewis PR got me thinking:

• Are service providers in the PR space not innovating fast enough?

• Or are PR agencies no longer able to grow simply by selling billable hours?

By bringing LSCORE to market, Lewis joins a growing list of public relations agencies that have developed, branded and launched products that are positioned to fill a void in the market.

A few years ago, Waggener Edstrom strayed into “vendor territory” when it started selling an “Influence Toolkit.”  In the 1980s, Fleishman Hillard took a similar tack with its Wire News Network, ostensibly a miniature newswire that operated as a profit center and made PR Newswire and Business Wire insane.

The mammoth advertising and PR services holding company WPP — owner of Burson-Marsteller, Hill & Knowlton and Ogilvy, among others — has plunked down some serious coin in this arena.  Cymfony, for example, is now under the WPP roof.

Strategically, services like the WaggEd and Lewis offerings seem to make sense as long as the firms did not spend too much developing the technology.  The agencies will likely upsell most of their own clients to the new platforms and non-clients who inquire will share information about their PR goals that make them more likely to become consulting clients.

But outside of those two pools of clients, it’s pretty unlikely competing agencies would recommend LSCORE or Influence Toolkit.  Without sales of their software through third-party agencies, the return on investment is harder to achieve.

That “I’ll-be-damned-if-our-agency-is-going-to-recommend-your-firm’s-software” conundrum is one reason PR services suppliers unaffiliated with agencies should continue to prosper.  After watching the success of Cision in selling hundreds of Radian6 subscriptions to PR clients, Vocus developed its own social media monitoring and analytics service and integrated it into its SaaS platform.  The new social product, according to Vocus CEO Rich Rudman, is selling like hotcakes.

In London, Glide Technologies has leapfrogged both Cision and Vocus with a very sophisticated, next-generation sentiment analysis and media evaluation tool.  Expect further innovation in this arena in the coming months from other suppliers.

We will keep an eye on LSCORE to see how extensively it is marketed outside of core Lewis clients like Lexmark, Mozilla and Pret a Manger.  In the meantime, we’ll watch competing firms like Weber Shandwick — which for years has been quietly supplying clients with monitoring and measurement through an extranet dubbed WeberWorks — to see if they jump on the selling-software-to-non-clients bandwagon.

OpenTable ended the unpleasant ritual of waiting on hold for a snooty hostess to  book your dinner reservation for a popular restaurant.

GPS devices from Garmin, TomTom and Magellin have made the concept of getting a TripTik from AAA seem almost quaint.

Calling a radio station DJ for help in identifying a song is no longer necessary, thanks to the Shazam iPhone app, which matches the digital fingerprint of a song and instantly displays the artist and title.

With all these technology advances, why is it so damn challenging for today’s time-constrained public relations professionals to shortcut the process of identifying and engaging with influential audiences, and  track the outcome?

My years with PR Newswire and subsequent board roles at Techrigy and dna13, taught me plenty about the never-ending software development process and the need to balance immediate code fixes with longer-term customer requests for new data and functionality.  Now that I’m enjoying a stint as an unbiased industry observer, I figured it was appropriate to ask the community using Cision, Dow Jones Media Relations Manager, VMS Insight and Vocus — and those who wish their budget could support such a luxury — to chime in with their wish list for the next generation of PR automation and software tools.

Ironically, it’s free software from Google, Moderator, that allows me to query the public relations industry and to tally votes on what questions should be asked of PR services providers.  With many of us gathering in October at the Public Relations Society of America international conference in Washington, DC, we should have a timely, specific and crowd-supported list of features to hand over to the development community.

Please take part in this exercise.  Sales professionals have Salesforce.com.  Finance people have their Oracle systems.  It’s only fair that PR officers push software suppliers to stay current and provide tools that will enable you to do your job as it evolves in 2011 and beyond.

A link to the Google Moderator survey on PR services is here:  http://goo.gl/mod/Cry4

The whole concept of a sabbatical is foreign to those of us who haven’t worked in academia. For someone who bought his first police scanner at age 14 and who has measured time in news cycles ever since, taking a pause to refresh was heresy.

Yet I found myself on “garden leave” – the term the British use to describe the time a departing executive is dormant before getting back to work –for much of 2009. The irony is that the only thing resembling a garden at our New York condo is a window box. Despite the lack of a plot to plant, I can honestly say the last few months have been exhilarating.

While I thought my work-life balance was in check before, now I actually know my daughters’ shoe sizes and the menu at the soup kitchen where my wife, Maureen, cooks gourmet meals three days a week. I also experienced the joy of mentoring two recent City University graduates, and helping low-income women gain self-sufficiency through a highly effective program called First Step.

On the networking front, I have been awed by all the brilliant entrepreneurs who are introducing fascinating and disruptive ways to do tasks that have long confounded marketing and PR pros. In private equity and venture capital, I have new respect for the discipline and guts it takes to find, fund and execute. And on the customer desktop, I share your pain that it’s possible to order a pizza through your Tivo but automating a MarCom department remains but a dream.

Today, as I prepare to begin a new chapter as a board member and vice chairman of dna13, I want to thank the many friends, peers and complete strangers who embodied the very spirit of social networking by brainstorming, opening their Rolodexes and challenging my preconceived notions about how PR, media, marketing and sales are intersecting, and the role that technology will play in that convergence.

Most people have never heard of dna13. Compared to an entrenched giant like PR Newswire, this Ottawa-based software company is very, very small. Yet dna13 is a wonderful example of how someone who’s an expert in his job – dna13 founder Chris Johnson worked in corporate communications for Bell Canada – can bring a fresh solution to market and watch it grow.

What does dna13 do? In short, users of dna13 software can listen to what is being said about their company across all channels — print, major market TV, online and social media. When the SM (social media) or MSM (mainstream media) hits the fan, the dna13 platform has cool permissioning features so subscribers can securely align team members to plan the synchronized delivery of messages. (Note: those who love managing their 500+ Google Alerts, emailing multiple “track changes” documents to their CEO, or plugging their good, bad and neutral hits into a spreadsheet should not look at dna13.)

dna13 is moving from entrepreneurial to growth phase. Because it’s set up in the Software-as-a-Service model, product development is nimble. I have never seen a better technology organization – moving from white board to production in days and weeks rather than months and years.

My new colleagues include seasoned sales, marketing and product people, super-capable COO Kevin O’Neil, as well as board support from software veteran Howard Gwin (PeopleSoft, IBM, Pivotal), Tom Birch of Propulsion Ventures, Inc. and Pierre-Andre Meunier of Celtic House Venture Partners.

To all those who invited me into their homes, offices, industry events and social networks during my transition, please know that I’m happy to repay the favor. Just say the word.