Wednesday, December 15, 2004


For one reason or another I get a bit nostalgic when I witness a great big business in a downward spiral. The one I am thinking of right now is Blockbuster. Their main business model is obviously at the end of the rope - who wants to shlep to the video store and only to find that what they want to rent is not available and if it is available it is scratched up and if you even get to watch it you are pretty likely to be hit with an unexpected late fee which is almost impossible to fight if they are wrong. But when there were no other options we were pretty happy going to BB, the store was clean and well taken care of and there was always an exitement of getting a movie. Or maybe that was just what being a kid feels like.
Anyways, why do I think BB is dead? Aren't they copying the successful model of Netflix?
The brilliance of Netflix was not the idea, but the timing. The idea of delivering movied via mail must have seemed crazy in the time when everything is going towards digital delivery. But Netflix saw the opportunity to gain market share in a small window created by the upheaval of physical-to-digital distribution switchover. This was not their ultimate goal, I venture, and I think the proof is in their recent teaming up with Tivo to do digital delivery. So while in short run BB can suck some market share off them (mostly opportunity market share, as I doubt current netflix customers will be wooed by the BB offering) they are fighting yesterday's battle. The company's creative spirit appears stagnant and while there always room for turnaround, the things are not looking good...
But in the end the decline of the companies is overall a good thing. Without it the world would be dominated by powerful and monopolies and invention and attendant economic improvement would stop. So, goodbye, BB (maybe)!

Swear this wasn't photoshopped!


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