It is truly the end of an era. It looks like in the next few days, the once mighty video rental chain, Blockbuster will file for bankruptcy. The Dallas-based company has had a very rough 2009. After a year of closing nearly a staggering 1,300 stores (and 100 more in 2010) and failing to meet the needs of video renters in the 21st century, Blockbuster finds itself in a $500 million debt. The only option, so it seems, to be filing for Chapter 11 Bankruptcy Protection.
Blockbuster couldn’t compete with internet based renters like Netflix, who had a very profitable 2009 by posting $979.7 million in profits. Blockbuster tried to get a piece of this market by introducing Blockbuster Online in 2004, a similar model to Netflix. I personally saw this venture as too little too late as Netflix had a strong stranglehold on this market they practically invented.
Netflix wasn’t the only undoing of Blockbuster, RedBox had a hand in their demise as well. In 2009, they launched efforts to grab a piece of this market by rolling out Blockbuster Express. Again, much similar to an existing model, Blockbuster Express gave customers inexpensive DVD rentals through convenient rental kiosks. Sound familiar?
The problem was instead of once being revolutionary as a rental retailer, Blockbuster just failed to follow trends long established by would be startups. The idea of too big to fail was a far cry from actually failing.
We, at the CriterionCast, have long discussed the eventual demise of Blockbuster. We all saw this coming and strangely we felt happy to see it arrive. No company in this instant gratification generation can survive without constantly changing their models as their customers change their consuming habits. Innovation is the only thing in this climate that can survive. Companies have to be 2 steps ahead of their customer’s needs. Look at last years out of business story, Circuit City. They couldn’t compete with the low prices, customer service and product selection of Best Buy and Walmart.
Simply following trends is failure as Blockbuster has demonstrated over the last 8 years.
What do you think of the fall of a once mighty company? Do you still have a Blockbuster membership? Which big box store is next? Borders Books?