Blockbuster bites the DVD dust- A Victim of Their Own Bad P.R.

Never was a truer article written. Blockbuster sucks.

from – No cause for alarm, but the Blockbuster stores are dwindling. We’re losing four locally and 20 percent nationwide. The closings come with a simultaneous push toward a lofty goal of 10,000 Blockbuster Express DVD-rental kiosk locations by mid-2010. Redbox DVD is already at 15,000 kiosks. Too bad you’re late for the dance, Blockbuster. Again.

There’s a business lesson to be had in Blockbuster’s dedication to a reactive rather than proactive approach to its industry. Seriously, when was the last time that blue-and-khaki cheese puff company was on the cutting edge of anything?

Blockbuster once sat as the king of the movie rental empire. Pre-Netflix, it was an incredible challenge to find another place to rent DVDs, or at least one that didn’t have swinging doors sectioning off the porn. The video giant proceeded to miss the boat on three major rental industry innovations following their rise to fame: Netflix DVDs by mail a decade ago and high-speed Internet connection the past couple years. Then, Redbox unleashed the $1 a night DVD vending machines – initially a McDonald’s endeavor, of all things. Coinstar used your extra pennies to buy them out this year.

Sure, Blockbuster later launched oh-crap-why-didn’t-we-think-of-this-first offshoots in response to fat losses in market share. Arguably, Blockbuster Online and Blockbuster Express’ blue boxes (perhaps you’ve seen one at a Publix near you) are competitive with the innovators. The problem is, Blockbusters’ ventures aren’t different enough from the originals to make up for how lame the company looks for being so short-sighted. Seriously, burger people beat you to the punch to diversify with free-standing DVD rental kiosks? As I’ve learned to say in journalism, Blockbuster, you got scooped.

Blockbuster has a serious image issue born from its own annoying nature. It has never been convenient or simple to rent from a Blockbuster store. Their ever-changing fees, pricing, reward programs and return policies were ridiculous. No visit was without a lengthy disclaimer from the cashier and even more lengthy receipt of Blockbuster’s infamous fine print.

So, if you didn’t leave the people with good memories of your store, how do you expect to convert them from your clever and convenient competitors?

Blockbuster Online and Express aren’t cheaper or better than Netflix or Redbox, plus it’s hard to make a leap of devotion to a company trading under a buck a share on the stock market. Netflix is well over $50 a share. With whom would you like to do business?

Through Blockbuster’s complacency, we see the action of capitalism. As more or less a monopoly in its heyday, the chain didn’t take an active interest in satisfying the evolving customer. With so many clear deficits in its services, it was all too easy for red envelopes and boxes to grab movie-lovers away. Every article I read while researching Blockbuster had a Netflix banner ad above it – a not-so-subtle message about who’s king of the mountain, and who’s the wheezing company struggling to stay relevant.

It’s a satisfying story, the Blockbuster saga, because we’re reminded that bad systems seem to trigger better ones. We the consumer do, in fact, have the choice to take our business elsewhere. Nothing fancy, a red hut in the parking lot will do.

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