I know this sounds either naive or obvious, but my forecast is not based on the advent of netflix and nextflix streaming or some other obvious disintermediator. Its part competition, but its also part bad service on their part. While one or the other could take a long time to bring Blockbuster down, the combination will kill them much faster.
Blockbuster came out with a great program back called Moviepass in 2002 (or so) to provide unlimited movie watching, provided you take out no more than 3 videos at a time. The selection was usually current and inventory has been generally good and the stores were ubiquitous — all good signs of a successful consumer experience. My family was avid almost daily trekkers to Blockbuster — more than the bank or drugstore or food store.
But they are losing to the internet on sheer convenience but are still winning on inventory. They have lost to Netflix on inventory and are barely ahead in convenience — convenience is defined as immediacy.
So I was dumbfounded this weekend when I had to pay for a movie that I could not get at my home store. I had to drive 5 miles and pay retail because my movie pass was not valid across Blockbuster stores. What kind of rule and service is that in the wake of the video streaming and Netflix onslaught?
But like the corporate dinosaurs they have become, Blockbuster is ignoring the competition instead of creatively responding to it. There is a clear spot Blockbuster could play in — the immediacy of great movies across any Blockbuster store.
Except they have not responded well. It costs them nothing to link the stores and their website and create a larger critical mass of inventory and value to a local population.
What are these guys thinking? They are already losing the convenience battle to the Internet and are barely staying ahead of Netflix in terms of immediacy. Whatever advantage they had in inventory is lost by not linking stores. Add the cost of the inventory on their books as compared to streaming and you can figure out that the movie houses will not be able to keep Blockbuster afloat by insisting on DVD sales instead of streaming sales.
Bye bye movie pass and $240/year. You have served me well, but refuse to evolve.
Peter 7:39 pm on March 16, 2009 Permalink |
I largely agree. Blockbuster had it good when people where used to driving to a store to rent movies. Things evolved. Netflix came out with movies by mail, and then internet streaming started. Blockbuster recognized both of these, but came to the game late and with products that were not of good quality.
I used Netflix for awhile, but have now moved onto VUDU. I didn’t like waiting for movies in the mail, so I decided VUDU was the best option. It suits me nicely and usually has the latest movies quickly and in great quality. Both Netflix and Blockbuster can’t deliver that yet.
The movie rental business is great to watch right now, no pun intended. So many companies are evolving and new technology seems to be coming out everyday. The consumers are winning either way.