Blockbuster to shutter up to 960 stores – CNET News.com
Sep 15, 2009 6:12 PM
Company plans to shutter unprofitable retail locations by the end of next year in an attempt to make operations more financially stable, SEC filing reveals.
To their credit Blockbuster has tried with some limited success to move away from the local physical store and follow Netflix into the virtual store space.
It appears to have been too little too late.
I’d wager that at some point in the last 15 years 80% of Americans held a Blockbuster membership card. Stopping by the local franchise, browsing the continually familiar shelves hoping to find anything new that was both interesting and in stock. Then trying to remember to reverse the process with a timely physical return of the VHS tape or DVD within the 72 hour window.
It was awesome at the time. Then Netflix raised the bar and Blockbuster was forced to react. Unfortunately for BB, they reacted too slowly, as is typical of large organizations to the fast moving world of the Internet.
At first Netflix served us with a minor exchange of convenience versus satisfaction. They asked us to trade having a new movie in our hands tonight for having one out of about three movies tomorrow in exchange for not actually having to leave our house to get it. In a nutshell, give us a priority list of movies you’d like and we’ll send you a copy of the highest listed film to you tomorrow depending on what we actually have in stock.
That model worked for some, but, the instant gratification of picking up a DVD from your local Blockbuster tonight and watching that movie tonight, made for an interesting battle.
That battle appears to be ending.
Netflix saw their challenge and embraced the concept of delivering content on-demand via specialized boxes via the increasingly common high-speed Internet.
Blockbuster was slow to respond to this “killer app” and is now paying the price.
The Internet solves several key issues with the physical model of Blockbuster.
1) No need to take time to go to a physical store.
2) Digital streams of video are always available. No more frustration of finding your preferred content out of stock.
3) And, of course, no more late fees.
To their limited credit Blockbuster did launch a digital answer to the Netflix challenge, but it was too little too late.
So, here we are. A society filled with home VCRs, DVD players, and even BluRay players looking for sources of content.
It seems the future is moving away from physical media and towards pay-per-view digital streaming.
The MPAA must be thrilled.
Thanks Netflix. You may have just killed us all.
