The Rise Of Blockbuster
Long ago small towns across America were filled with modest video rental stores ran by moms and pops; that was until a giant by the name of Blockbuster Video came along. Once Blockbuster showed up in a town these stores had no chance of survival and ended up closing their doors shortly after, there was truly no one that could stop Blockbuster from beating the pulp out of the little guys. At its peak Blockbuster was operating nearly 10,000 profitable stores around the nation and had a market value of $5 billion dollars that was until 2011 when they would file for bankruptcy (Downes, Nunes, 2013). Blockbuster may have not fallen overnight, but many missteps and the blinders that were put on towards Netflix surely did not help. In 1998 Reed
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First, Blockbuster should have been more open to the way in which the movie rental market was headed. Ordering DVS’s or streaming movies directly to devices just does not happen overnight, it gradually happens over a period of time. Blockbuster failed to identify and ignore the signs until it was too late and this could be seen with comments such as this by former CEO’s “I’ve been frankly confused by this fascination that everybody has with Netflix …Netflix doesn’t really have or do anything that we can’t or don’t already do ourselves” (Siegler, 2011). Second, don’t buy the competition until you invest in your own future. Blockbuster trying to respond to the weakness in the market tried making several acquisitions with businesses such as Hollywood Video and Circuit City, both companies who were feeling the effects as much as they were once again causing Blockbuster to lose focus on who its future customers would be (Ramsey, 2010). Third, act fast and be committed. Blockbuster lacked both, acting fast and the commitment to keep up with its competition, this can be seen as they were late with introducing their own DVD by mail service and streaming service after Netflix announced their plans for the future. Fourth, understand what the consumer wants. In the case of Blockbuster their focus was on how to maximize profits from customers and how to get more into the store instead of focusing on what customers valued (Ramsey, 2010). Had Blockbuster listened to the voice of their consumers they may have never laughed at Netflix in the first place instead they may very well be around today. Finally, Blockbuster should have recognized the business they were in and not the one they thought they were in. Blockbuster was so focused on their store front video rental business that they failed to recognize they were really in the business of “distributing entertainment content to
First, Blockbuster should have been more open to the way in which the movie rental market was headed. Ordering DVS’s or streaming movies directly to devices just does not happen overnight, it gradually happens over a period of time. Blockbuster failed to identify and ignore the signs until it was too late and this could be seen with comments such as this by former CEO’s “I’ve been frankly confused by this fascination that everybody has with Netflix …Netflix doesn’t really have or do anything that we can’t or don’t already do ourselves” (Siegler, 2011). Second, don’t buy the competition until you invest in your own future. Blockbuster trying to respond to the weakness in the market tried making several acquisitions with businesses such as Hollywood Video and Circuit City, both companies who were feeling the effects as much as they were once again causing Blockbuster to lose focus on who its future customers would be (Ramsey, 2010). Third, act fast and be committed. Blockbuster lacked both, acting fast and the commitment to keep up with its competition, this can be seen as they were late with introducing their own DVD by mail service and streaming service after Netflix announced their plans for the future. Fourth, understand what the consumer wants. In the case of Blockbuster their focus was on how to maximize profits from customers and how to get more into the store instead of focusing on what customers valued (Ramsey, 2010). Had Blockbuster listened to the voice of their consumers they may have never laughed at Netflix in the first place instead they may very well be around today. Finally, Blockbuster should have recognized the business they were in and not the one they thought they were in. Blockbuster was so focused on their store front video rental business that they failed to recognize they were really in the business of “distributing entertainment content to