Blog Post - Stephen Wicks
According to the company's Wikipedia entry, at the height of it's popularity in 2004, Blockbuster Video employed 84,300 people worldwide, including about 58,500 in the United States and about 25,800 in other countries, and had 9,094 stores in total, with more than 4,500 of these in the US. They were a giant in the home video rental industry.
Fast forward to today in 2018, they now only have one retail store in the United States. That's right... only one.
How could BlockBuster Video's huge fall from grace have happened in only 14 short years? How can a company this large, with this many resources have fallen in such a huge and epic way?
Well, I think I know the basic answer. The one that should be painfully obvious to most true entrepreneurs. Yes, I'm sure there are complexities to the answer that we won't get into here, but it really boils down to one major issue. The company was made obsolete by a few new players in the home video market.
The two most notable thorns in BlockBuster Video's side were 1.) Netflix and 2.) Redbox. These two companies had business models where their customers did not have to go into a physical retail store in order to watch and consume home videos.
Netflix gave the consumer the opportunity to easily go online and order videos to be delivered to their home by US mail on DVD or they could stream the rented movies through the internet. In the case of Redbox, the company employed a fleet of rental kiosks at local grocery stores, pharmacies, and other convenient retail locations. These two companies totally got rid of the need to physically go into a retail store and browse the selection of movies. The consumers loved these new business models. The consumers clearly wanted more convenience and more options when renting movies.
The tragic flaw of the leaders in BlockBuster Video was that they did not constantly keep their eyes open for what would come in the future. They did not adequately analyze the competition from the two new players in their industry. They also didn't keep up with the wants, needs and desires of their customers.
As business owners, you MUST and I repeat... MUST stay on the lookout for changes in your industry. You MUST know what your customers want and expect. No matter how large you are as a company, you CAN fail. You cannot afford to get "caught slippin" when it comes to satisfying the needs of your customers and staying on top of industry trends. If you don't ,you just may find yourself in the same shoes as BlockBuster Video... a Wikipedia entry of what used to be.
Lead Designer / CEO
Stephen Wicks Internet Development Company