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How Blockbuster Could Have Owned Netflix 385

Posted by Unknown Lamer
from the video-store-killed-the-video-store dept.
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 Who is next to join Blockbuster, Polaroid, Borders and Best Buy on the ash heap of superseded retail business models?"
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How Blockbuster Could Have Owned Netflix

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  • Who's next? (Score:5, Insightful)

    by Anonymous Coward on Wednesday November 13, 2013 @08:54AM (#45411853)

    Slashdot!

  • Pretty much. (Score:5, Interesting)

    by Anonymous Coward on Wednesday November 13, 2013 @08:59AM (#45411911)

    I remember when netflix first started out, it took blockbuster YEARS to FINALLY get a dvd by mail system, and it was still overpriced as hell.
    They continued to make moves acting as a monopoly, refusing to believe they could ever have any competition.
    This was a fatal mistake.

    • Re: (Score:3, Insightful)

      by FearTheDonut (2665569)
      This reminds me of Microsoft....
    • Re:Pretty much. (Score:4, Insightful)

      by TWiTfan (2887093) on Wednesday November 13, 2013 @09:41AM (#45412319)

      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:Pretty much. (Score:4, Interesting)

        by pnutjam (523990) <slashdot.borowicz@org> on Wednesday November 13, 2013 @09:52AM (#45412447) Homepage Journal
        I'm glad to see those making-of and the "Let me tell you why I'm so great" extra features go away. I found them pretentious and irritating.

        However, I'm not a huge movie buff, so take my opinion for what it is worth.
        • Re:Pretty much. (Score:5, Interesting)

          by L. J. Beauregard (111334) on Wednesday November 13, 2013 @10:07AM (#45412605)

          What I most dislike about the rental versions is that they often have trailer after trailer and they disable the "skip this" button. (Note to DVD vendors: DO. NOT. DO. THAT. If I choose to skip the trailer, you have already lost the sale. Giving me that damned icon instead of doing as I asked only annoys me.)

          • by mattack2 (1165421)

            trailer after trailer and they disable the "skip this" button.

            The funny thing is, movie trailers are one form of advertising that I *really* like, but I want to be able to watch it when I want to watch. I actually also REALLY like it when the trailer(s) for THE SAME MOVIE are contained on the disc. It's entertaining (for me) to compare the actual movie with the trailer(s). Whether they "put the funny two chunks into the trailer", or more interestingly to me, show sections of the movie completely out of

      • by Grishnakh (216268)

        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).

        Here's a clue for you: Redbox.

        • by TWiTfan (2887093)

          The selection is Redbox is a joke compared to Blockbuster. Blockbuster carried a lot of smaller, older, and indie titles that Redbox would never carry in a million years. Redbox is great if you're looking to rent a copy of the latest superhero-movie-of-the-moment, not so great if you're looking for the latest indies (which Blockbuster would usually carry at least a few copies of).

          • Re:Pretty much. (Score:4, Insightful)

            by Grishnakh (216268) on Wednesday November 13, 2013 @12:38PM (#45414387)

            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.

            • by antdude (79039)

              I wished Netflix had a non-subscription payment system. I rarely watch stuff these days. I like Amazon and iTunes for their on demand payments. However, I dislike buying videos that I have to keep forever. I only want to watch them once at a cheaper price!

    • Re:Pretty much. (Score:5, Interesting)

      by fermion (181285) on Wednesday November 13, 2013 @10:00AM (#45412533) Homepage Journal
      I recall reading an article about the guy who built blockbuster. He was originally in trash. That is, he rented the big bins for commercial trash. He stated that blockbuster and trash collection were basically the same thing. One has some initial investment that does not degrade much over time, and after a while that investment is covered with rental fees. After that it is pure profit. So the idea of blockbuster was to turn over product as quickly as possible to pay for the initial product and get into a profit position. Obviously things like late fees helped. The idea of paying a flat fee for as much product as you wanted for as long as you wanted did not.

      Of course this guy has long left Blockbuster and is doing other things, so there was room for new management to do other things. OTOH, I can see how blockbuster might be attached to their original business model, brick and mortar and all that. Really what has killed them is the long term decline in the value of movie you watch at home. There was a time when you were paying $50-100 to buy a video, so paying $5 to rent it was a value. Eventually studios realized how much money they were leaving on the table, dropped prices for many movies, and cut sweetheart deals with blockbuster, which further eroded the value of home video, and made Blockbuster prices seem expensive. Finally the internet made movies free, Netflix figured out how to compete with free, and blockbuster did not. Really, blockbuster, like other firms simply could not keep the legacy structure and succeed.

      • Back around 2000, I and a potential partner seriously explored owning a Blockbuster franchise. I eventually concluded that technology would be its downfall and backed out. In retrospect, It seems like a my vision was correct technically, but I probably still would have made some good money. The success story of Blockbuster is more interesting to me than the demise.
  • Typical (Score:4, Insightful)

    by PPH (736903) on Wednesday November 13, 2013 @08:59AM (#45411917)

    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.

  • by Narcocide (102829) on Wednesday November 13, 2013 @09:01AM (#45411925) Homepage

    Followed shortly thereafter by the USPS, unless Amazon just outright buys them.

    • by The Phantom Mensch (52436) on Wednesday November 13, 2013 @09:28AM (#45412191)

      I'm not sure I'd right off the USPS. Their parcel business seems to be growing rapidly, with very competitive prices for small fixed price boxes.

      I think the big shopping mall anchor stores (Macy's, JC Penney, etc) are all likely to fail in the next 20 years. Sears is already a dead man walking, Penney's is close and the others are living on borrowed time.

      • Fitting rooms (Score:5, Insightful)

        by tepples (727027) <tepples&gmail,com> on Wednesday November 13, 2013 @09:39AM (#45412293) Homepage Journal

        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.

        • What is to stop Amazon from buying up departments stores for a dime right before they finally fold and having Amazon stores, where you can try some things on, order it, and it is at your house by the time you get home?
          • They'd have to run them, which costs money. It would be a big change to their business model, and it's not necessarily something they'd be good at. As such, it's a big risk. Which doesn't mean they won't try.
          • by seinman (463076)
            One of the primary reasons that Amazon prices are so low is because they don't have any retail buildings to staff and maintain. If they start buying up stores and stocking them with staff, equipment, and merchandise, they will lose that edge.
          • So you'd have the item on.

            Buy it.

            Then go home and wait for it to be delivered? ...

            Why not just take it home?

            • It could scan the customer and then make the garment to fit using a 3D printer.

              And yes, of course they'd accept payment by bitcoin!

          • Re:Fitting rooms (Score:4, Informative)

            by Anonymous Coward on Wednesday November 13, 2013 @10:50AM (#45413073)

            As a slashdotter this may shock you: The malls are busy and very profitable. Department store space isn't going to be cheap anytime soon. Even in failing malls retailers like Target are happy to buy the big anchor store spaces.

            People still buy their clothes at local stores, and the main reasons are probably:
              1. Your computer still can't accurately represent colors, which are key to dressing.
              2. Manufacturers still can't cut clothes correctly, so you have to try on things in your size in brands you know.
              3. Manufacturers still don't know what an inch is, so no one actually follows a sizing standard.
              4. The sort of people who pay 3 times what their clothes are worth like to make a day out of shopping.

          • What is to stop Amazon from buying up departments stores for a dime right before they finally fold and having Amazon stores, where you can try some things on, order it, and it is at your house by the time you get home?

            What would stop Amazon? Sound business sense and reality are what would stop them from doing this.

            It doesn't matter whether Amazon would buy sites or lease them - either way it's not going to be a "dime". Paying staff, and costs for 100,000 square feet for showrooms and fitting rooms seems pretty bizarre. They could do a bricks and mortar tie-in, but not at this scale while relying on their existing business model. The idea here is pretty much that the previous guy went bust because of a dying business mode

        • by sehryan (412731)

          So does the Gap, and all other smaller clothes stores. So does Kohls, Marshals, and all other "discount" clothes stores.

          As with Blockbuster, the threat was not solely from online, but a mix of online and alternative retail.

        • True. But the ones cited by the grandparent are all having their lunch eaten by Target and Wal-Mart, by the rise of the all-one supercenter retailers*, as well as by more specialized retailers (Toys R' Us, various clothing chains, etc...).. That's been a huge problem for department stores for a long time - you're competing with literally everyone. The rise of the mall specialty store over the last fifty years and the all-in-one supercenter over the last twenty have been particularly problematic. The bi

      • I'm not sure I'd right off the USPS. Their parcel business seems to be growing rapidly, with very competitive prices for small fixed price boxes.

        In Canada, I greatly prefer Canada Post to UPS or any of the other corporate carriers like DHL. I've had carriers stick my packages in the mailbox (which is fine) and fake a signature (which is not). They ring the doorbell and walk away without leaving a note to tell me they were here. If I'm home I have to run to the door to have any chance of catching them. Sometimes they leave my packages sitting on my front door (I live downtown on a busy street). With UPS and DHL, sometimes I have to go out to the burb

        • In Canada, I greatly prefer Canada Post to UPS or any of the other corporate carriers like DHL. I've had carriers stick my packages in the mailbox (which is fine) and fake a signature (which is not).

          UPS just sucks. I had packages sent to me marked "Signature Required" and come home to find that package sitting out in the open at the front door.

          • by nwf (25607)

            In Canada, I greatly prefer Canada Post to UPS or any of the other corporate carriers like DHL. I've had carriers stick my packages in the mailbox (which is fine) and fake a signature (which is not).

            UPS just sucks. I had packages sent to me marked "Signature Required" and come home to find that package sitting out in the open at the front door.

            Probably depends on where you live. Where I am, UPS is pretty good and FedEx sucks so bad I no refuse to order from companies that use them (I'm thinking of you Harbor Freight.) The most annoying this is they leave packages in front of your garage door, so you conveniently run over them when you leave. This is despite many complaints. They claim that people like it that way, but no one else is that stupid. And when the product is damaged, they claim it's not their fault. That and FedEx ground is slower than

    • Goddamnit, USPS is not supposed to be profitable. Its a function of the Republic.
      • On the other hand, the USPS is not supposed to losing money. It is supposed to be self-sufficient.

        It might make more sense to have direct subsidizes from the government to provided universal access in the more remote areas.

    • by mcgrew (92797) *

      Followed shortly thereafter by the USPS, unless Amazon just outright buys them.

      Dream on, teaboy. Have a look at the US Constitution. [cornell.edu] "To establish post offices and post roads;"

      Getting rid of the USPS is unconstitutional.

  • by Greyfox (87712) on Wednesday November 13, 2013 @09:02AM (#45411941) Homepage Journal
    They'd have tried to shoe-horn late fees into Netflix. That's where all Blockbuster's money came from. Renting videos was just a loss leader for late fees. They didn't take Netflix seriously because they didn't have late fees and Blockbuster didn't see how anyone could make money just renting videos.
    • by dunezone (899268) on Wednesday November 13, 2013 @10:56AM (#45413151) Journal
      Blockbuster had a service like Netflix and it was launched in 2004. The Blockbuster DVD-by-Mail was an interesting endeavor because everyone thought they were going to compete head to head with Netflix. The problem is that when you examined the Blockbuster DVD-by-Mail service it had a hidden agenda and that was getting people to come back to the stores.

      With Netflix they sent you a DVD, you send it back through the mail, they send you another. With Blockbusters service they send you a DVD and you could either send it back and they send you a new movie OR bring it back to the stores and exchange it for a so-called rental. Except that new rental is subject to late fees and restocking fees WHICH they announced in 2005 they were getting rid of which they secretly didn't and this brought upon them a massive lawsuit.

      http://en.wikipedia.org/wiki/Blockbuster_LLC#Misleading_advertising [wikipedia.org]

      This was their way of getting people to come back to their stores and adding on late fees which was their cash cow.

      Blockbuster is the perfect example of a company that knew the industry was changing and somewhat attempted to adapt but wouldn't let go of the past completely.In my opinion Netflix wasn't what damned them it was just the beginning. Redbox is what really killed them.
      • by JWW (79176)

        Yep I got smacked by that bogus "No late fees" campaign.

        For a measly $8 in late fees they lost a customer and earned someone who detested their company.

        Good riddance Blockbuster! You sucked as a company and deserved all the bad things that happened. The fact that you utterly failed to deal with mailed DVD's and streaming is just gravy for the schadenfreude.

  • About Polaroid... (Score:5, Interesting)

    by TheloniousToady (3343045) on Wednesday November 13, 2013 @09:03AM (#45411951)

    Polaroid is already gone. For the last few years, ever since they stopped making instant film, Polaroid has been nothing more than a brand name to be licensed out (presumably, to attract folks who still have fond memories of instant film.) For example, all those cheap portable Polaroid-brand DVD players are made by somebody else. That's in contrast to Best Buy, which is a real corporation, and Borders, which is at least a division of a real corporation, Barnes & Noble.

  • Like being raped with late fees?

    If Blockbuster had bought Netflix, I would have cancelled my account immediately.
    • I actually have a few fond memories of Blockbuster. My first memory was when my mom drove us thirty minutes to a Blockbuster and I remember being blown away but the sheer amount of movies. All of our local mom and pop stores had pretty poor selections. They also charged a yearly membership fee while Blockbuster was free.

      Years later, I would visit this Blockbuster in college where I bought Night of the Living Dead for five bucks which completely rocked my world. This same Blockbuster had a section called "Le

    • by jandrese (485)
      My memories of Blockbuster was a store that if you weren't interested in the latest half dozen or so releases, then they weren't interested in you. The selection of older movies was extremely sparse and they were always checked out. I went in a few times and came out empty handed because there was just nothing interesting in stock. Then Netflix came along and I never went back to Blockbuster again. Netflix was rarely out of stock, and had an absolutely enormous catalog of older and obscure movies. Even
  • Hey, its a little too soon to talk about Borders that way. Some of us are still in mourning.

    • by drinkypoo (153816)

      Why the fuck (insert pic of Patrick Stewart here) would you miss Borders, the worst of all chain bookstores? They never ever have anything but new releases and the most popular of older works. If I'm going to order something and wait for it to come in, I'm not going to involve a bookstore. I'm going to get it much cheaper from Amazon or eBay. Borders was worthless, and in every case of which I'm aware it displaced something the people would rather have had.

      • Was Borders a bookstore? They seemed to have about as many books as a newsagent. I'd always thought that their business model was selling coffee to people who liked to be near books, but didn't actually want to read them...
      • by stdarg (456557)

        I generally prefer Barnes and Noble to Borders, but in the town I lived in a few years ago there was only a Borders and it was a fine bookstore.

        Both companies really popularized the idea of a large bookstore with popular books, lots of open space, chairs, and a cafe. They didn't at all mind if you bought a drink and read an entire book. It was like a library with enough copies of popular books to go around plus a built-in coffee shop. Who doesn't like that? And contrary to popular belief (e.g. the movie You

      • to read. If you wanted to read old stuff, then you should have been shopping at a used bookstore. They are good for the older titles and often have a broad selection. But Borders was a nice place to find a new book to read.

        • by drinkypoo (153816)

          My favorite used bookstore is also a better new bookstore than Borders. It's in Santa Cruz, where I no longer live, and it's called Logos. The Borders moved in within a stone's throw, but obviously was defeated.

          Sadly, I can think of few other examples. Location, location, location...

      • I liked the Borders store *by me* more than the Barnes and Noble stores *by me*

        They were better lit, organized better, and the shelves were maybe 1-row shorter so it didn't feel as claustrophobic in there. The layout was also a little nicer and more casual than the B&N near me. They usually had what I was looking for: tech books, books to help out in college courses, classic lit, sci-fi, fantasy, new, old. My tastes aren't that obscure.

        That being said, at some point the B&N near me remodeled and

        • I should emphasize the *by me* portion of my post.

          It could just be that the B&N's in my area were poorly managed for a while and not really "the norm" when compared to B&N's nation-wide.

  • Best Buy (Score:5, Informative)

    by Danathar (267989) on Wednesday November 13, 2013 @09:07AM (#45411983) Journal

    It's not dead yet.

    http://blogs.wsj.com/moneybeat/2013/11/11/best-buy-sp-500s-best-performer-getting-still-more-praise/ [wsj.com]

    They are not out of the woods, but things like price matching amazon have helped a lot. I've personally not bought from Best Buy in a long time, but recently after buying something on Amazon I checked how much it would of cost at Best Buy and realized for a little more I could of had it that day for about the same price.

    Polaroid? Borders? That's old news.

    • by Lumpy (12016)

      I have been in Best buy 3 times in the past year, and each time was to look at an item, I left without buying it because their prices are too high and I don't like getting assaulted by know nothing sales people. Then they have the fricking Dish network people in store that pressure sell you about their crappy service.

      So I looked at the item and bought it on newEgg from my phone on the way out of the store.

      • by Danathar (267989)

        did you ask if they would match the newegg price?

      • by oodaloop (1229816)
        I was the same way. But this last time, I bought a Samsung Galaxy Tab 3 7.0. I checked the price on Amazon while in the store, and it was the exactly the same with no shipping. Granted, I paid sales tax in Best Buy, but it sounds like pretty soon we'll be paying sales tax on Amazon too. The accessories, OTOH, were hideously overpriced, so I went home and ordered on Amazon.
    • by RoTNCoRE (744518)

      But for how long? Technology retailers and manufacturers have a huge money sink in the inventory required to support brick and mortar retail operations. One store sells out, another has 10 units that they can't move for whatever reason (demographics, poor location, the minimum wage employee couldn't be bothered to find it etc.). Amazon can consolidate all the supply in their warehouses, cross ship between them for little cost based on economies of scale in shipping, and all the inventory is available to all

    • My biggest issue with Amazon is delivery. It seems like most of the time when I need something, I need it now. For example, the other day I broke the microphone/headset that I use to record video presentations and make Skype calls with my students. I drove down to Best Buy, picked one off the shelf and was back home at work in less than an hour. Waiting two or three days for Amazon to get it to my door really wasn't an option.
  • by JoeMerchant (803320) on Wednesday November 13, 2013 @09:11AM (#45412005)

    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.

    • by drinkypoo (153816)

      What everybody forgets is that these changes usually are obvious, but most people willfully ignore them.

      When cars showed up, it should have been obvious that buggy whips were going away. Likewise, when streaming video became a ubiquitous thing, it should have been obvious that video disc rental was going away. The whole DVD-by-mail thing was just Netflix figuring out how to profit from its death throes.

      • by JoeMerchant (803320) on Wednesday November 13, 2013 @09:43AM (#45412339)

        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...

      • Likewise, when streaming video became a ubiquitous thing, it should have been obvious that video disc rental was going away.

        Going away, not quite gone away. Streaming releases on Netflix, as I understand it, happen several months after the DVD release. Streaming is still impractical among people who can't yet move out of an area where nobody offers cable or fiber Internet. And how well is streaming doing in Europe and Australia/New Zealand, which have fewer potential customers per country and per language market than anglophone North America?

  • by TWX (665546) on Wednesday November 13, 2013 @09:11AM (#45412009)
    "I'm not dead."

    "What?"

    "Nothing. There's your ninepence."

    "I'm not dead."

    "'Ere, he says he's not dead."

    "Yes he is."

    "I'm not."

    "He isn't."

    "Well, he will be soon, he's very ill."

    "I'm getting better."

    "No you're not, you'll be stone dead in a moment."

    ...

    "I feel fine!"
  • It was Mom-n-Pop video stores that were the shiznit, The king of them all was Kim's Mediapolis in Morningside Heights in NYC, which arranged films by director. Blockbuster was never more than an annoying lowest-common-denominator experience designed by mediocre MBAs. May they rot in hell.
  • ....Just wishful thinking. I can't wait...

  • by TechHSV (864317) on Wednesday November 13, 2013 @09:16AM (#45412055)
    If Blockbuster had purchased them, they never would have made the leap to delivering over the Internet.
  • by Lumpy (12016) on Wednesday November 13, 2013 @09:17AM (#45412077) Homepage

    They could have killed/bought redbox and netflix easily. But the Executives at Blockbuster are still too stupid to realize that they had to change models. I guarantee they still deny they did anything wrong.

    If you are only looking at next quarter, then as an executive you are a complete and utter moron.

  • Blockbuster died... (Score:5, Informative)

    by Bartles (1198017) on Wednesday November 13, 2013 @09:19AM (#45412101)
    ...for me when they claimed they could not stop the computer from charging a fine to my credit card when I returned a movie 2 hours late. I cut my BB card in half in front of the cashier. Circa 2002.
    • Re: (Score:2, Insightful)

      by Anonymous Coward

      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.

    • They lied to you.

      When I was in undergrad, working at Blockbuster was my part-time job. It was quite fun actually, but anyway, management can remove fines if they want, it's real easy to do.

  • Blockbuster fell into the same myopic hole as Sears did in the 90s. At the start of the Internet boom, Sears had everything in place to be what Amazon is - they already had a full catalog service that delivered by mail and also had in-store pickup. A simple "order from" website would have been all that was needed as the rest of the infrastructure was already in place. Instead, Amazon owned that space and Sears is struggling to remain relevant.

  • by MyLongNickName (822545) on Wednesday November 13, 2013 @09:27AM (#45412179) Journal

    Folks automatically assume that if Blockbuster bought Netflix that Blockbuster would be sitting on top of the streaming video world. More likely Blockbuster would have either killed the business either intentionally or through incompetence. When you have an entrenched management team that only understands one way of doing business and whose careers are based on a traditional distribution model, you will find that they don't adapt well to a new distribution model. My bet is that a new competitor would have eaten Blockbuster/Netflix' lunch.

    Odds are Blockbuster was better off not making the purchase.

  • by Phoenix666 (184391) on Wednesday November 13, 2013 @09:34AM (#45412261)

    The next retail model to go belly up are GameStops and the like. When Steam is fully up and running there will be no reason to buy your own copy any more, which means the lucrative secondary market many game stores rely on for profit margins will go away.

    Incidentally when Steam is fully transitioned to Linux it will have an effect on prevalence of MS in the home, too.

    • Re: (Score:2, Troll)

      by east coast (590680)
      Steam has been up and running for years...

      Oh, I see the problem...

      Incidentally when Steam is fully transitioned to Linux it will have an effect on prevalence of MS in the home, too.

      You're living in a fantasy land.
      • IN a fully realized system, you will have one big Steam Machine running Win/Mac/Linux and little linux based streamers to each TV.
    • by kamapuaa (555446)

      Gamestop doesn't sell computer games anyway. As long as consoles remain popular and games come on a disk, I don't see them going away. And that seems like it's going to be true for at least the next seven years.

  • by T.E.D. (34228) on Wednesday November 13, 2013 @09:44AM (#45412349)

    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.

  • The premise of this story is that Netflix could have been bought by Blockbuster, and that Blockbuster would then have operated Netflix pretty much as it is operating now. Under this assumption of more dynamic Blockbuster management, they would have been shutting down the retail stores about now anyways, since they are not profitable any more.

    In other words, the world would be just like it is now, but with a different brand name on a website. No more or less movies would be available to consumer, and ther

    • by jythie (914043)
      Actually, it probably would have killed Netflix.

      While people like to focus on Blockbuster's strategic decisions, they tend to do this from a bit of a tech fetish perspective and forget that retail rental was pretty profitable until pretty reciently. What really killed Blockbuster was being spun off from its parent company with around a billion dollars in someone else's debt, which meant much of its profits went into loan payments.

      Sadly, if your lawyer is good, it is perfectly legal to buy a company, take
      • by timeOday (582209)
        It seems to me that most mergers are for the benefit of top management. The investors have stock in both companies so it hardly matters to them - they only benefit if the whole is really more than the sum of its parts. There's no direct way to measure this - even if the merged company is soon worth more than the two that were combined, maybe it's because they're now monopolizing the industry, so the extra profits come at a cost to other industries in which investors also have shares.
    • by CCarrot (1562079)

      The premise of this story is that Netflix could have been bought by Blockbuster, and that Blockbuster would then have operated Netflix pretty much as it is operating now. Under this assumption of more dynamic Blockbuster management, they would have been shutting down the retail stores about now anyways, since they are not profitable any more.

      In other words, the world would be just like it is now, but with a different brand name on a website. No more or less movies would be available to consumer, and there would be no more or less net jobs.

      I can't think of one meaningful thing it would have actually changed.

      Mail service in Canada, perhaps?

      I will very much miss Blockbuster, not for the renting so much, but for the cheap used DVD / Bluray purchasing options...so many of my movies came from Blockbuster...

  • by RevWaldo (1186281) on Wednesday November 13, 2013 @10:03AM (#45412573)
    No, I don't know how. But then again, neither do they. They won't even see it coming.

    .
  • "Your age probably determines whether you think of Blockbuster Video as a fond memory or a dinosaur predestined for extinction."

    How about neither? When they came into town, the locally owned ma & pop video rental that had been around since the dawn of home video rentals closed almost immediately.
  • by Kagato (116051) on Wednesday November 13, 2013 @10:18AM (#45412723)

    Best Buy got rid of the C level staff that were associated with the old CEO/founder. The new CEO made a number of hard choices and focused on the fundamentals. That has lead to a significant recovery. The stock price has more than tripled and they are one of the best performing companies on the S&P500 right now.

    Major point, the online pick-up is now part of check out area and not customer service. For years I hated using online pick-up because without fail I would be stuck waiting behind someone making the financial transaction of the century. I used to use Circuit City pick-up all the time because it was always ready when I got their. I found it less frustrating to use Amazon and wait the extra day instead of waiting in line. So it's a great change.

    They making some good changes to the loyalty program. It's one of the easier ways of getting money back on purchasing rarely discounted Apple Hardware.

    They got out of some really badly done deals internationally. The Cellphone Warehouse deal for UK expansion gave Cellphone Warehouse a cut of BB's US cell sales.

    Certainly there is risk for them. If all the changes don't turn into great numbers for the holidays it could spell disaster. We'll know in a couple months.

  • How could they have possibly known that people would prefer to stream videos directly from their couch rather than leave the house into whatever nasty weather was waiting for them outside and drive all the way out to a store full of loud and misbehaving children only to find that every movie worth watching had already been rented?

    Don't get me wrong, I have plenty of fond memories of renting movies and video games from Blockbuster. But they had nearly two decades to prepare for the transition to digital a
  • The problem is that some businesses think that they are entitled to a given business model and way of getting money. These companies are the ones that will inevitably fail because they can't take the risk of killing their own cash cow. History is littered with examples from Kodak to Polaroid and so on.

    What I don't see though is people willing to site companies that are willing to sacrifice their sacred cows and look for news ways of doing things. I'm going to cite IBM which was once so synonymous with makin

  • by roc97007 (608802)

    > Who is next to join Blockbuster, Polaroid, Borders and Best Buy on the ash heap of superseded retail business models?"

    I'd say the Microsoft OS and office suite divisions. They're still trying to maintain these as major revenue streams at a time when these things are commonly free.

    I think Microsoft as a company will continue to exist, but as a smaller, device oriented company.

  • by GodBlessTexas (737029) on Wednesday November 13, 2013 @01:09PM (#45414853) Journal
    While working at Enron Broadband Services in 2000, we had partnered with Blockbuster to create a video on demand service, and had all the main/regional CLEC/ILECs as partners to provide last mile connectivity. We were able to stream better than VHS, but slightly worse than DVD quality video over a 1Mbps Internet connection that required you to have a set top box. We had successfully demonstrated the technology in the lab and were going into the first run trials to beta customer homes when Blockbuster pulled the plug. So they could have beat Netflix to the punch by bypassing the DVD rental business entirely and going straight to VOD, but they decided not to. Also, a little known fact is that it was the pro-forma $150 million Enron booked as earning on that VOD project before it ever hit a customer home that brought increased scrutiny to their financials before they ultimately went out of business a year later.

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