I used to remember as a child as Blockbuster locations would sprout up around my hometown, killing off mom & pop stores and Supermarket rental operations. As a big national chain they had the power of large volume, wide selection, and many locations. Now with Netflix and Redbox breathing down their necks, Blockbuster is one of the last big rental chains left standing- perhaps not for long.
So what happened? I thought I would take a moment to think out loud as one of the biggest name in home movies maybe hitting the cutting room floor.
You Don’t Carry Thin Blue Line
Have you heard of it? It is an Errol Morris documentary about a strange police murder in Dallas. In college I was on a Morris kick and tried to watch all of his works. Today I can’t find it in any of the local Blockbuster chains in my area, but it’s only a click away with Netflix.
While Blockbuster has a large collection of popular titles, think about how many niche and odd requests Netflix has been able to accommodate, sure not everybody is looking to see the Thin Blue Line but it’s a long tail effect at work.
Netflix Has Convinced Us To Value Money Over Time
Netflix has greatly streamlined their delivery process and has made great strides with their instant streaming capabilities, however when it comes down to time Blockbuster has always had the advantage. If I really want a movie I could drive on over to the store and rent it rather than wait for it in the mail.
However we all lead busy lives and if we return a rental late, we are hit with late fees. With Netflix’s system we traded the convenience of local stores for the freedom of unlimited rental time and no late fees. In essence, Netflix has worked around a person’s busy schedule (can’t get around to watching the DVD this week? Don’t worry- send it back whenever you want!) RedBox has the convenience of local location and is open 24-hours a day. Of course the longer we hold on to a DVD, the better it is for these businesses, but in today’s world we expect business to work around our schedule- that’s why we have 24-hour stores and online retailers.
A Price Structure You Can’t Beat
How much does it cost to rent a DVD at Blockbuster? $5-$7? I pay $9 a month for Netflix and Red Box offers rentals for only $1. Blockbuster is trying but probably won’t get close to pricing out the guys in Red. Blockbuster currently has a Netflix-like service out but it’s too little too late.
You Can’t Put Up A Store Everywhere
Ironically Blockbuster became the biggest rental chain and had the most locations- until Netflix was able to beat that with coverage anywhere you can receive U.S. Mail. Now the coverage is even better- if you are able to get online where you are then you can access Netflix and watch movies online.
In the end what made Blockbuster a dinosaur so quickly was its inability to see how the world was changing, now it’s trying to catch-up before it becomes another memory of our past. Isn’t it weird though to think how the world has changed: what would you think ten years ago if somebody told you that we would rather have our movie rentals mailed to us?
Does anybody out there still go to a brick and mortar place to rent movies? Do you still think Blockbuster still has a chance to remain relevant?