De-evaluation of Blockbuster Video

 

Bill Krysinski 

Doctoral Research: Futuring and Innovation (CS875-2003C-01)

Unit 4 Discussion Board 3

Dr. Cynthia Calongne 

September 5, 2020

 

De-evaluation of Blockbuster Video

Everything changes, and nothing remains the same. The story you will witness in this discussion board is a tale of multiple market force changes from competitors, consumer habits, and, most notably, technology. Picture this, and it is 5 PM on Friday in small-town America circa mid-to-late 1990s. Your parents pull up in the parking, and the adventure begins. Your sister wants to see "Single White Female," your mom and dad want to watch "Wayne's World," and you want to see "Hellraiser III." Be kind rewind is on the door as leave the exit door of the beautiful world of Blockbuster video.

Innovation was at the heart of the business model for Blockbuster. The core of their success was in their ability to take advantage of technology such as VHS, then DVD, video game rentals, and eventually streaming services. Blockbuster survived nearly 40-years before succumbing to the changes in the way customers changed habits in consuming movies and how technology and the internet changed the way we watched movies. At the height of Blockbuster video's success in 2004, they had over 9,000 stores and nearly $6 billion in revenue (Olito, 2020). At the start of the new century, Blockbuster forego the opportunity to purchase an unknown but ultimately the nail in the proverbial coffin for Blockbuster, as they did not buy Netflix for a nominal fee of $50 million. 

Also, two years later, Redbox kiosk began to pop up around the US, and convenience was introduced at a lower price point than Blockbuster and no late fees for the consumer. This change impacted Blockbuster's bottom line by nearly $200 million when they removed late fees from their business model. Less than a decade later, Blockbuster filed for bankruptcy, and now only one store remains open in rural Oregan.   

Consumer behavior and missed opportunities lead to the inevitable demise of Blockbuster. In terms of sociotechnical planning, understanding the various supporting and challenging forces would have allowed senior leadership to make changes based on consumer habits and technological changes that permitted these patterns in behavior to exist. Finally, flexibility is the key, and large organizations created during that time were by design not as flexible as companies that took advantage of technology.

 

References

‌

Olito, F. (2020, January 16). The rise and fall of Blockbuster - Business Insider. Retrieved

September 4, 2020, from Business Insider website: https://www.businessinsider.com/rise-and-fall-of-blockbuster

‌