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"The Fall Of Blockbuster Video" 
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Burning Godzilla
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I found this article series a couple of weeks ago. It gets into the nitty gritty of why Blockbuster failed. It definitely refuted some of the things I thought I understood.

In short: In the mid 2000s, under a very good CEO, Blockbuster was extremely well positioned to drive Netflix out of the market, but then an amazingly stupid move by a hostile board member triggered the series of events that led to their quick demise.

The key takeaway: when assessing failed businesses, disruptive changes in the market are only part of the story. Ego-driven management decisions are often at the root, especially when leaders forget about what made their company great in the first place.

http://daindunston.com/when-blockbuster ... y-were-in/

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Tue Nov 03, 2015 10:21 pm
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Burning Godzilla
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Thanks for posting that. It was really interesting.

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Wed Nov 04, 2015 3:44 pm
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Burning Godzilla
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I remember hearing that one of the reasons Blockbuster (and Hollywood Video and all the mom and pop stores) were able to make money renting VHS tapes out is that they cost 90 bucks new for the first year or so that the general home viewer would rather rent than buy. When DVDs became the standard, the manufacturers approached Blockbuster with the same deal and they decided not to worry about DVDs because they didn't think the format was going to change anything in the industry.

Additionally, when Blockbuster started carrying DVDs they stuck to full-screen rather than widescreen at a time when televisions were being changed to accommodate people watching widescreen movies at home.

Their other massive problem was switching to "1000 copies of whatever is out this weekend and nothing else". Netflix and your local library beat the hell out of that selection easily. Sure, there might be eight hundred people a night that want to watch The Lady in the Water but sooner or later they're going to do something else.

As a corporation, Blockbuster loaded a gun, emptied it into their left foot, reloaded and drew a bead on their right foot.

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Wed Nov 04, 2015 4:13 pm
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TelstarMan wrote:
I remember hearing that one of the reasons Blockbuster (and Hollywood Video and all the mom and pop stores) were able to make money renting VHS tapes out is that they cost 90 bucks new for the first year or so that the general home viewer would rather rent than buy.



If video stores are doing as badly as you seem to think, then how do you account for the continuing success of Family Video?


Wed Nov 04, 2015 9:27 pm
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Burning Godzilla
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Fornax wrote:
TelstarMan wrote:
I remember hearing that one of the reasons Blockbuster (and Hollywood Video and all the mom and pop stores) were able to make money renting VHS tapes out is that they cost 90 bucks new for the first year or so that the general home viewer would rather rent than buy.



If video stores are doing as badly as you seem to think, then how do you account for the continuing success of Family Video?


They rent out pornography, which Blockbuster and Hollywood Video refused to carry.

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Last edited by TelstarMan on Thu Nov 05, 2015 11:24 am, edited 1 time in total.



Wed Nov 04, 2015 10:12 pm
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Burning Godzilla
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I suppose I'm not the first to note the irony of the company's name, then.

Around here the stores that sold only "adult" videos are pretty much all gone, disappearing at about the same time as the mainstream video stores.

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Wed Nov 04, 2015 10:59 pm
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And interesting thing to note is that Blockbuster Canada was still largely in the black, even opening new stores, but when Blockbuster in the States declared bankruptcy they happened to owe about $60 million to the Studios, and guess who was the guarantor on that debt? You got it, Blockbuster Canada! That debt falling on us tipped our scales into the red. Months later Blockbuster Canada closed it's doors.

Thank you America, you cost me my job.

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Thu Nov 05, 2015 4:26 am
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TelstarMan wrote:
Fornax wrote:
TelstarMan wrote:
I remember hearing that one of the reasons Blockbuster (and Hollywood Video and all the mom and pop stores) were able to make money renting VHS tapes out is that they cost 90 bucks new for the first year or so that the general home viewer would rather rent than buy.



If video stores are doing as badly as you seem to think, then how do you account for the continuing success of Family Video?


They rent out pornography, which Blockbuster and Family Video refused to carry.


Isn't there a contradiction here? You say that Family Video "refused to carry" pornography, yet you also say that they rent out pornography. In any event, I've never seen pornography at the Family Video store in town.


Thu Nov 05, 2015 4:45 am
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Burning Godzilla
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Today I met with a potential client, and she happened to mention she took a stint working at Red Box between 'real' jobs. We talked about Blockbuster and Red Box, and she said Red Box is on its way out. Boxes are starting to disappear from the sidewalks. They can't compete with Netflix, they didn't have a strategy beyond renting DVDs and videogames, and they feel the box is the main thing that distinguishes them. They want to find new, more retail-y uses for the box, but they can't come up with anything. Soft drinks and snacks have already been done. One of their execs suggested they offer a QVC type service...in a box!

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Thu Nov 05, 2015 8:05 am
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Burning Godzilla
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Fornax wrote:
TelstarMan wrote:
Fornax wrote:
]



If video stores are doing as badly as you seem to think, then how do you account for the continuing success of Family Video?


They rent out pornography, which Blockbuster and Family Video refused to carry.


Isn't there a contradiction here? You say that Family Video "refused to carry" pornography, yet you also say that they rent out pornography. In any event, I've never seen pornography at the Family Video store in town.[/quote]

That's because I wrote down the wrong chain name. :) Blockbuster and Hollywood Video refused to carry pornography and are now both out of business. Family Video has it and is still around. The original post has been edited for accuracy but I'm pretty sure your quote of the inaccurate version won't be automatically changed.

Look for a discreet alcove in a back corner next time you're at Family Video, or just ask an employee where the pornography is. When I interviewed at one during Jobpocalypse 2014 one of the interview questions was about whether or not I had any problems with the store carrying porn. I said that carrying pornography was probably a significant reason behind the chain not going bankrupt like Blockbuster and Hollywood.

Didn't get the job, but that doesn't change the fact that the store manager brought the subject up in a job interview.

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Thu Nov 05, 2015 11:29 am
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Burning Godzilla
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TelstarMan wrote:
Their other massive problem was switching to "1000 copies of whatever is out this weekend and nothing else". Netflix and your local library beat the hell out of that selection easily. Sure, there might be eight hundred people a night that want to watch The Lady in the Water but sooner or later they're going to do something else.

As one of those who, at the time, found their offer of rental by mail combined with local store credit to be more attractive than Netflix, another mistake they made was that their mail service committed too many errors of sending out incorrect or defective discs.

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Thu Nov 05, 2015 2:40 pm
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Burning Godzilla
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The only thing I'm bringing to this conversation is that two locally-owned video rental places in the small towns near me are still doing good business. Neither of them rent out porn - that I know of. (I don't look for it as all my porn needs are met by the interwebs - a detail of which I'm certain belongs in the TMI bin).

Both stores always seem to have customers. They are very diversified - the one in Cynthiana also offers about twelve tanning beds offered at prices that so-called Tanning Salons/Boutiques won't stoop too. And they keep up with video game rentals. Neither belongs to a chain that I know of - maybe one is a Family Video retailer.
But I go there at times simply because it's cheaper than pay-per-view and the terms are generally pretty good. New movies are usually full weekend rentals. Older titles are 4-5 day rentals.

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Thu Nov 05, 2015 3:35 pm
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Burning Godzilla
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Plus, you don't need to subscribe to 20 different services to get a flippin' movie!

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Thu Nov 05, 2015 5:04 pm
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Burning Godzilla
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Bergerjacques wrote:
The only thing I'm bringing to this conversation is that two locally-owned video rental places in the small towns near me are still doing good business.

I seem to remember you saying that internet service in your area was rather backward, with most people still having dial-up connections. Is that still the case? Because if it's outrageously difficult or expensive to get good broadband internet, then your local home-entertainment ecosystem looks a lot more like the one that video rental shops used to thrive in than it does the one where Blockbuster and Hollywood Video couldn't survive.

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Thu Nov 05, 2015 8:33 pm
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Blockbuster Video was eventually absorbed into Lojas Americanas (sort of a small-scale Target) over here. Most Mom 'n Pop stores in São Paulo have closed down due to competition from Netflix, Cable TV, torrentes and piracy. Out of the six I've visited in the past few months, four have been selling off their entire stock. One has visibly turned to vídeo game retail to supplement its income. Only one place, which is probably the physically smallest of all, seems to be doing well. In their case, they switched their entire catalog over to Blu-Ray, and do their darndest to keep the place clean and well-lighted. And neither place rents porn (the vídeo store closest me used to, but stopped doing so years ago).

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