What Happened to Blockbuster? The Decline of a Business
Blockbuster was a home movie and video game rental service provider based in the USA. They had video rental shops but they could also provide DVD-by-mail services as well as video on demand, cinema theater and streaming services. There was a time that this company was the leader in its industry and had over 80,000 employees worldwide. We all know the story of Blockbuster and Netflix and the two different trajectories these two companies took, if not then head over to runrex.com to get the full lowdown on it, but what really led to the filling of bankruptcy and collapse of Blockbuster? This article will look to examine just that.
One of the things that may have led to their decline as a business model maybe the fact that they may have been blinded by their own success. This is because at their peak they were making billions of dollars in revenue, with a much detailed breakdown of their finances at that point to be found on runrex.com. On the other side of the coin, the new and emerging companies in this field were not posting good margins at all and therefore didn’t look as enticing especially to Blockbuster’s management at the time. It was the usual snob of the newcomer by the established company and it may have played a role in Blockbuster’s decline. They felt that with the slim margins and the small market at the time, these new markets didn’t seem worth it especially since the old market was still very profitable.
Another thing that may have led to the decline of Blockbuster is that they definitely failed to recognize the changing of the times. When Netflix and the rest of the up and coming companies in this field were coming up, they were riding the crest of a technological wave that had already began to sweep through the world and consequently through the entertainment and movie renting industry. At that time, Blockbuster felt that as a retail service, they had no business getting involved with the tech industry, which they felt emerging companies like Netflix were. They may have felt that their customer base would remain untouched despite the emerging companies. There was also the further emergence of powerful companies in the tech field such as Apple and Amazon, with their influence in this filed being highlighted in greater depth on runrex.com. In addition to the above competition Blockbuster was now all of a sudden facing, cable companies also entered this market with streaming and video-on-demand services. All this competition proved too much for Blockbuster especially since they seemed to have been left behind by all these new up and coming companies.
Another aspect that is equally important when looking at what happened to Blockbuster and their decline is the matter of the costs that could have been incurred if they had decided to change course. We have to keep in mind that Blockbuster was majorly a brick-and-mortar company with majority of their revenue coming from retail stores. This means that if they had decided that the seemingly new way of doing things at that time was indeed the right way to go, then it could have involved a complete revamp of their business structure. They could have had to make a complete about turn from their retail stores which would have been a drastic change to say the least. They would also have had to invest in brand new infrastructure in terms of technology, with detailed explanation of the changes that would have been required to be found on runrex.com. It became clear that for them to change course they had to completely strip down and restructure their business and operational model and this may have convinced them that they would have been best served staying as is, a decision that we know now played a major role in their decline.
As discussed above, the change of the landscape in this field caught Blockbuster cold and the failure to keep up with the change in the times may have contributed to their decline. Another factor to note is that they actually tried to react to this wave of change, albeit belatedly. Faced with competition from seemingly all corners, they decide to react and for instance decided to trial a new DVD-by-mail service. They also put up their own website so as to compete with the rest on online streaming. They felt that the strength of their brand name would help counteract the effects of their coming late to the party. However, this wasn’t to be as their late response meant that they remained behind the curve in this filed as compared to their competition and subsequently, Blockbuster as a business declined and collapsed.
From this article, it is quite clear that Blockbuster failed to recognize the changing of the times and when they finally decided to act, it was too late in the day to save their bacon. This eventually meant that the company declined and finally filed for bankruptcy. This article only just begins to scratch the surface on this subject and there is a lot to be learned on this and other topics. For more on this and much more, ensure you visit the ever reliable runrex.com.