Blockbuster Video has to be, in my opinion, one of the most interesting marketing studies in the last fifty years, along with New Coke. Hear me out a minute. Back around 1990, Blockbuster Video was a bona fide sensation. I mean, people couldn’t wait to go to one for the first time. They were coming across the country in one blue-and-orange wave, and people were primed. They were psyched. They were incredibly joyous.
Blockbuster Video was an application of the chain store concept, except for video stores. In the 1980s, you probably shopped at Sears, KMart, or Walmart, or you shopped at one of their competitors. These were large organizations that brought consistency and a large selection to shopping. However, when it came to renting movies, you probably went to “Video World” or “Video Revolution” or “The Beta Hut.” Video stores back then were all owned by local merchants who were just trying to figure out what they were doing.
And then came Blockbuster Video.
Blockbuster took a time-worn concept and made it fresh. Using national contracts, they bought tons and tons of movies into large, well-lit stores with a consistent experience. If you couldn’t find a movie in one store, it was probably in another one down the street. Before you knew it, Video World was no more and it seemed like Blockbuster was the only game in town.
Which of course means they got sloppy.
Blockbuster took a practically bulletproof advantage and used it to completely self-destruct. Within ten years, Blockbuster went from fresh and fabulous to tired and expired. It happened because of the very deals that brought them such success. Their contracts prohibited them from selling movies under retail price, while competitors sold them for far less. Those contracts kept the same movies in the “new releases” section for over a year. With no local competition, they got smug. Getting a movie for the night went from sheer delight to being a trudge down disappointingly stale aisles.
That explains Netflix.
We all know what happened to Blockbuster: we all got Netflix. Blockbuster’s service, selection, and prices were so bad that we decided we would rather actually wait to a movie to come via US Mail than go down the street to see if it was available. That is absolutely amazing to me. I mean, how bad do you have to be if your competition can make people wait days or weeks for something you have in stock, and THEY STILL WIN.
Obviously, Blockbuster was that bad. They missed the opportunity to get in on mail-order discs until it was too late and their plan was a disappointing copy of Netflix’s without the really good web portal. They turned to streaming about the same time Netflix did and once again, a bad web experience torpedoed their ambitions.
Remember when DISH bought them?
In retrospect it probably wasn’t the smartest purchase, but after a 2010 bankruptcy, Blockbuster’s assets were sold to DISH. They proceeded to shutter almost all the stores and eventually integrated the streaming service into its own on-demand selection. I was right there on the front lines in 2013 when it all went down.
Funny thing, the story doesn’t end there.
Fairly recently, John Oliver reported that there are still four Blockbusters in Alaska, and they thrive because high speed internet apparently doesn’t exist there. Mr. Oliver seems to have taken a liking to them, and he’s not the only one. Apparently in the northernmost state they’re a real phenomenon. Check out what he says:
I guess you just can’t count Blockbuster out. Who knows, maybe 10 years from now Netflix will be gone and they’ll rise again.