Blockbuster Goes Bust - Surprise!
Blockbuster has filed for bankruptcy. The company is staying in business and apparently doesn't plan to shut down any stores at the moment, but the fact that it's in deep trouble does not exactly come as a gigantic surprise. Between Netflix DVDs-by-mail and Redbox kiosks and various streaming and download services and cable-TV on-demand services, the whole concept of driving to a large store to rent a movie on a shiny disc is an inherently antiquated concept.
Of course, for Blockbuster, the fact that it doesn't face immediate liquidation may count as good news: Its biggest retail rival, Hollywood Video, went bankrupt in February and closed all its stores a few months later.
Blockbuster was founded in 1985, grew rapidly for years, and, at one time, made a lot of sense. I certainly spent a fair amount of time trolling its aisles for VHS tapes at one point. Let's face it, though-it was never a particularly pleasant place to be, nor one that treated its customers all that well. The more options that people got for avoiding Blockbuster, the more they tended to do so.
(Side note: Not too far from where I live, there's a venerable independent video store called Le Video. It's amazing-it pretty much feels like everything ever released on DVD and/or VHS is in there, all on fastidiously organized shelves. It's run by people who obviously love movies. Unlike Blockbuster, it seems to be doing fine.)
Like many once-mighty business enterprises, the company doesn't seem to have a clue about how to evolve as its customers' needs did. What can you say about an outfit that tried to buy Circuit City in 2008, just before that company collapsed? It quickly realized that was a bad idea, but couldn't anyone who was paying attention have told it that?
The thing is, it's not that people don't want to watch movies anymore. In theory, the Blockbuster name should be a major asset for an online service along the lines of Netflix's Watch Instantly or Amazon Video on Demand. Blockbuster does have an online service, but it's an embarrassment-it requires Internet Explorer and a Windows download, uses flaky Microsoft copy protection, doesn't seem to be compatible Windows 7, and is overpriced. It's as if the company isn't even trying to be part of the 21st century.
It's not Blockbuster's fault that video-rental stores are largely obsolete. But it is its fault that it's not in better shape to survive the end of the business model that made it famous.
So how long do you think it'll be until the last Blockbuster store puts GOING OUT OF BUSINESS signs in its windows? I give it three years, but I could be overly optimistic...