How Blockbuster Could Have Owned Netflix 385
schnell writes "Your age probably determines whether you think of Blockbuster Video as a fond memory or a dinosaur predestined for extinction. While the last Blockbuster rental at the last remaining Blockbuster video store took place last week, Variety retells a now-classic story of how Blockbuster could have bought Netflix for a song, but didn't because it failed to take the new DVD-by-mail and video streaming markets seriously. Who is next to join Blockbuster, Polaroid, Borders and Best Buy on the ash heap of superseded retail business models?"
Who's next? (Score:5, Insightful)
Slashdot!
Typical (Score:4, Insightful)
Some business people look inwards to optimize their existing business in search of profits. Others look at how the market around them changes. Changing ones business model is stressful and not something everyone can do.
Besides, as an investor, I'd rather put my money where I think the market is going. If management keeps changing focus, I never know what I'm pursuing. Let the Blockbusters of the world rise and fall. I'll buy in or cash out of the trends as I see them.
Blockbuster Business Model (Score:5, Insightful)
Easily applied to any new/old tech pair (Score:5, Insightful)
How could Blockbuster have eaten Netflix's Breakfast, Lunch, and Dinner? Easy: take all the same risks Netflix took, invest more capital (which Blockbuster had at the time), and abandon their proven business models earlier than they did.
The buggy whip makers could have beaten AC/Delco to the punch if they only followed this same crystal ball strategy.
What everybody forgets is: Pets.com et. al. Sure, they look silly today, but there was a time that they attracted investment dollars that Netflix didn't get.
Blockbuster would have dragged them down (Score:5, Insightful)
Re:Pretty much. (Score:3, Insightful)
Fitting rooms (Score:5, Insightful)
I think the big shopping mall anchor stores (Macy's, JC Penney, etc) are all likely to fail in the next 20 years.
Department stores have one big advantage over online stores: fitting rooms.
Re:Pretty much. (Score:4, Insightful)
Yes, Blockbuster lagged behind and was a victim of their own hubris, but I'll still miss them. I never was a huge fan of Netflix going to the subscription system for DVD's. I miss being able to go down to a video store and rent a physical DVD/Blu-ray of the latest videos at a flat rate (with better video quality and all the great extra features that you don't get with streaming).
Unfortunately, Netflix is likely on the verge of abandoning their DVD/Blu-ray by mail program, and special rental versions have all but made extra features an extinct species (still not sure why Blockbuster started buying those and gave up the ONE major advantage they had over streaming services, were they really THAT much cheaper?). One of the great things about DVD's/Blu-Rays (and even before that laserdiscs) were those great commentary tracks and extra features. Sometimes they were better than the movie itself (Cannibal: The Musical, anyone?). Now I'm afraid they're gone for good. No more great commentary tracks and making-of documentaries for us film buffs. And, until bandwidth improves, no more 30mbps 1080p video.
Re:Easily applied to any new/old tech pair (Score:4, Insightful)
But it's not entirely clear when streaming will "take off," speaking from 2005 perspective - is the bandwidth there? will regulation step in and make Netflix pay for their inordinate use of the backbone? (still unknown), what devices will people consume media on? will Netflix be able to get their red button on enough remote controls? Most of these things are clear now, but were not so clear 8 ot 10 years ago.
Those newfangled cars, where are you going to fill them up with petrol? There's grass to eat clear from New York City all the way to San Francisco, and if you need to bale up some hay to cross the mountains, you can do that easy enough on the prarie for free...
Old "failed to take seriously" argument (Score:5, Insightful)
I hear this argument every time for companies that fail to shift to a new market reality. Examples are Xerox (with their PARC stuff), Polariod, Blackberry, IBM back in the day, record companies, etc. That's a complete misreading of the issue. It isn't about having some misguided sense of humor, its about fear.
The problem entrenched companies have is that while they have a market that they dominate that is acting as the company gravy-train, all the incentives in the world are acting upon them to protect that gravy train. This works well for them with normal competitors, but if someone finds a way to undermine the entire system (eg: online distribution for music), no matter how inevitable the coming change may be, it is a direct attack on their gravy train, and they will attack it back. If they tried to do the same thing themselves, at best they'd only cannibalize their own sales. What good is that?
Yes, it may be short-sighted. But we are a short-sighted species. A company's employees don't take their salary "in the long run", and their families don't eat "in the long run" either.
Re:Blockbuster died... (Score:2, Insightful)
There was a known fee for a late video, and you returned the video late, and got a fee? And then cut you cut your card in front of a minimum wage employee for doing his job properly?
You sound deranged.
Re:Pretty much. (Score:4, Insightful)
Here's what you said before:
I miss being able to go down to a video store and rent a physical DVD/Blu-ray of the latest videos at a flat rate
Redbox has all the "latest videos", which to most people, colloquially means "all the latest Hollywood fare".
If you want indie stuff, that's what Netflix is for. If you want indie stuff right now, without a wait, then you need to buy it on Amazon or wherever, and pay for same-day or overnight UPS shipping since you're such a spoiled ass. Expecting the market to support thousands of stores nationwide to rent indie videos at absurdly high prices is unrealistic. Obviously, there's not enough people willing to pay for such a service to keep it afloat.