The Oaks Ignore Their Pleas

Requiem for a Heavyweight

Posted in General by Jeff Graves on November 11, 2013

It wasn’t until 2004 — six years after Netflix launched — that Blockbuster realized it needed to enter the online DVD rental-by-mail space. By then, Netflix was already turning a profit and Redbox had just launched. Blockbuster was already dead — they just didn’t realize it yet.

It’s such a great example of a company resting on its laurels and getting blindsided. But it’s hardly even fair to call it a “blindsiding”. Blockbuster probably could have done dozens of things to counter the rise of Netflix in that initial six year space. They were either simply too arrogant, too slow, too stupid, or all of the above to make a move.

MG Siegler, in TechCrunch, April 2011

An interesting chapter in business history comes to a close this week, with the final shuttering of Blockbuster Video.  There were once Blockbuster franchises nearly everywhere, but the rise of the digital age made the idea of going somewhere and renting a physical DVD an anachronism.  Many observers of digital space could see the inevitable, but not the management of Blockbuster, who continued to keep to a retail-focused strategy that was destined to fail.  MG Siegler wrote this piece 2 years ago, as the collapse of the venerable video chain had started in earnest, but as he points out, the Blockbuster story is instructive for any startup looking to compete in a space dominated by big players.  Sometimes, being the biggest isn’t enough, especially if the leadership is convinced that they don’t need to adapt.

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