Blockbuster, it’s the internet stupid


When I saw this story come across my RSS reader, I almost spit out my drink. It seems that Blockbuster (in an attempt to remain relevant) is trying all kinds of new things. Let's face it! Netflix kicked your butt and you're in a fight for your survival. I get it. However, you have to realize that while you were hell bent on charging me obscene(more than the movie cost) late fees back in the day that someone (Netflix) figured out a way to eat your lunch by letting customers keep their movies as long as they wanted for one flat rate. Netflix continued to grow their business by moving BEYOND THE DISC (MEDIA) MODEL and partnered with every company they could on delivering (TiVo, Sony, Microsoft, etc.) streaming movies.

The fact that one of your newest ideas involves customers walking up to a kiosk and downloading a rental or getting a rental on a memory card shows me that you still don't get it. The "drive to my local movie rental store to pick up media" model has a very short life ahead of it. Maybe it's just me, but I think you should be investing more towards getting movies into the hands of your customers via the Internet and on mobile devices. You made a great first step by hooking up with TiVo. Although I'm happy with Netflix and iTunes I did cheer for you. You should really continue in this direction!


iTunes isn't going away!

The fact I can rent a movie right on my Apple TV in my living room should make you guys really nervous. Partner, Partner, Partner. This will be the key to your survival. Look at the boxes people are buying and hooking up to their HDTVs and do whatever it takes to get on those boxes at a reasonable price to your customers. Competition is great! Compete!

16 Replies to “Blockbuster, it’s the internet stupid”

  1. You are absolutely right Terry. It was that darn drive to the video store that caused the stupid late fees in the first place. I stopped using Blockbuster years ago and opted just to buy the movies at walmart for $14-$19 instead rather than incur $50 in late fees. Thevdrivw to return (as well as pick up) movies was so inconvenient. When iTunes came along I was almost in heaven. I say almost because their selection was terrible but at least the renting/buying process was as simple and immediate without me having to so much as get up out of my easy chair. The days of driving to get movies on physical media o any sort are over and the fact that Blockbuster can’t see the handwriting on the wall is disturbing. One doesn’t need an MBA to figure that one out. Great post. I must say that I’m rooting for Blockbuster as well. If they could just figure out how to allow people to download those jumbo packs of twizzlers they would dominate the market!

  2. Price and convenience still has a place. RedBox is handing it to all of their competitors. The US$1 per night is a great deal – especially for kid movies. Blockbuster’s model of charging too much and dingy retail locations is done.

    1. I give Redbox 7-10 years max (and that’s only because of the slow adopters). It’s a dying business as immediate download movies become the norm through tivo, netflix, apple, xbox, etc. One of these years in the not too distant future they will declare, “The disc is dead!”

      1. Ken: IF everyone had broadband in the US, I’d agree. Until we catch up to the rest of the world with broadband penetration and speed everywhere, there will be a place for physical delivery. I was in Italy 2 weeks ago and was jealous when someone on the train pulled out their cell phone to watch tv.

    2. Kid’s movies are only 99cents at Blockbuster for five days, and you don’t get charged untill tenth day for any fee because of the five day grace period.

  3. Kick around Blockbuster all you want, but when they go away (and it is likely a question of when not if), you’ll be paying Netflix $35 plus a month for your DVDs. Also there are a lot of both dial up customers and satellite customers with ‘fair use’ limits that prevent us from downloading the movies on demand.

  4. Adapt or die. Blockbuster is large and had the resources to adapt, but it evidently lacked vision. It’s not like this snuck up on them suddenly. There are clearly some customers out there without broadband Internet and they need a provider, but NetFlix showed them that USPS and convenience is still a powerful tool. Driving to a store to fill up a memory stick is a pretty lame concept and I’m surprised they went to the expense to move forward with it.

  5. Netflix haven’t partnered with all they could! In fact, they haven’t partnered with the leader, Apple, but with the also-ran, Microsoft.

    Apple doesn’t really need Netflix or Blockbuster though, not nearly as much as Netflix, etc… SHOULD be putting their video on the iPod Touch and iPhone, not the PC.

    1. Brian,
      in the case of partnering with Apple, my suspicion is that Apple isn’t looking for partners of this type as they already have a rental model of their own. In this case it would be in Netflix’s best interest to try to get an iPhone/iPod touch app out that does streaming. However, again this would be at the mercy of Apple approving it or not.

  6. Blockbuster is stuck with lots of brick and mortar. Technology has vaulted over Blockbuster. Similar to countries that couldn’t provide phone service with land lines simply skipped that technology and now have wireless phone service. What would be a good use for a concrete block building painted blue?

  7. What they ought to do with the kiosk thing is partner with Safeway et al. That way folks who have dial up and/or don’t want to deal with the monthly fee model (think people w/o credit cards) could hit the kiosk on their way in or out of the store.

  8. You have to have a credit card to use Redbox or BlockBuster Express.

    The problem with the online model is that you have to be a subscriber. You have to pay monthly dues. I find that fewer than 1% of the movies made are worth watching so I don’t want to have to see 3 movies a month or whatever.

    Secondly if you want full fidelity blu-ray movies the only way is on disc today. Even if you get HD quality online its usually compressed. Apple only gives you compressed 720p and I am not sure what Netflix gives.

    But until Netflix can give me a $1 or $2 blu-ray quality movie, I am not going to be a subscriber.

    Redbox and Blockbuster can both do that and there are others out there competing. These services work for me, employee people in my community and even encourage me to go to the grocery store. So all in all I prefer them to netflix, which does nothing for my local community.

  9. I feel no loss if Blockbuster disappears. Strange that I haven’t used them in probably 5 years or more but still have resentment over their insane policies and greed at movie-lovers expense. I don’t think Netflix views them even as a strong competitor. Apple seems more positioned to keep netflix in line and visa versa. As more movies are available as digital downloads and as bandwidth increases, the cable and sat operators will also get bigger in this service.

  10. I have a blockbuster kiosk right in my grocery store so it’s actually very convenient for me. I also discovered that you can return the movie to any kiosk.
    Here’s the interesting thing: since I rented my first $1 kiosk movie, I keep receiving emails from Blockbuster with coupon codes, so I’ve probably rented about 7 or 8 “free”movies. That deal’s hard to beat 🙂

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