Blockbusted: A Netflix Knock-Out, Bad Metaphors on the Path to the Movie Monster’s Bankruptcy — from Fast Company – Technology by Austin Carr

The Blockbuster age is fading, and at last the company is preparing for bankruptcy. In the past two years, the shrinking video-rental store has struggled to stay afloat with $920 million in debt, drowning all the while in revenue losses of $1.1 billion. The LA Times reports that Blockbuster executives and senior debt holders have entered discussions with major movie studios for a “pre-planned” bankruptcy mid-September.

But for everyone other than Blockbuster’s sunny faced spin masters, bankruptcy was about as surprising as another Rocky comeback. Blockbuster’s brick-and-mortar business was unviable in the digital world, and competitors Netflix and Redbox took every advantage to pick apart the dinosaur’s carcass. The company’s numbers have signaled extinction, too, with value withering from $8.4 billion when Viacom purchased it in 1994 to total market value of $24 million today. Continuing the Mesozoic metaphor, here’s why bankruptcy hit Blockbuster like a surprise asteroid.

Netflix Who?

From DSC:
And I would add the questions:

  • “Who cares about the iPod?”
  • “What does Internet-related technology have to do with our business anyway?”

In a presentation I created last year (see Section II), I used Blockbuster as an example of an organization who completely discounted the disruptive impact of technology..and now they are paying the price (along with much of the newspaper industry).

There IS a lesson here for those of us in higher ed.

I’ll end this posting with the following quote/excerpt:

“This is a pattern we see over and over,” he said, of the many parallels he could draw to Blockbuster’s financial troubles. “If a company is not able to keep up with the changing needs of its customer, it will become irrelevant,” he said.

Ultimately, it was these words which may have saved the company. Blockbuster was not able to keep up with the changing needs of its customers.

Blockbuster has become irrelevant.

Staying Relevant

Relevant addendum: