Assumptions and Failures

Woman eating popcorn binge watching tv

I have fond memories of going to Blockbuster on Friday evenings to pick out a movie for a night in. I sometimes wish I was able to take a break from the on demand lifestyle that I’ve become so accustomed to and browse movies the way it used to be, however times have change, users needs have evolved, and Blockbuster did not keep up with the shift.

Blockbuster was founded in 1985 by David Cook in Dallas TX. Over the next 20 years, Blockbuster would grow to become an undeniable giant in the consumer entertainment industry boasting about 9,000 retail stores by 2004. Blockbuster offered brick-and-mortar establishments with wide rental selection of new releases and classics, as well as snacks and refreshments for purchase. On the downside, Blockbuster imposed some pretty steep late fees if the customer did not return the rental in time. These late fees accounted for quite a bit of Blockbuster’s revenue. In 2000, Blockbuster collected $800 million in late fees from its customers. Blockbuster’s late fees in combination with a largely brick-and-mortar model resulted in some pretty frustrated customers, which would ultimately help propel the company’s downfall.

Founded 1997, Netflix was a fledgling startup offering a completely online DVD rental and sales platform. By offering this service online, Netflix could keep costs lower, and provide customers a convenient way to rent a wide selection of titles through the mail. Shortly after its inception, Netflix launched a subscription service that allowed customers to rent unlimited selections for one low monthly price, eliminating the need for late fees. The customer could rent the selection and keep it for as long as they’d like, then return it for a new title — all from the comfort of their own home.

Blockbuster didn’t believe technology such as online streaming services would threaten the company as quickly as it did, and they continued to push focus on its retail stores instead of endeavors such as Blockbuster online and eliminating late fees. In 2010, Blockbuster filed for bankruptcy.

Today Netflix has over 148 million paid subscriptions in over 190 countries, making it the worlds leading internet entertainment service. There is still one Blockbuster that exists today, the last Blockbuster in the world. Located in Bend, Oregon, customers can come to this Blockbuster to browse rental selections by thumbing through staff picks, finding a lesser known titles with eye catching box art, and ultimately being able to freely choose a title browsing selections the way it used to be.