Very interesting article on Fast Company about the blockbuster not so slow fall to bankruptcy, and the reasons behind its decadence. And the most startling thing about this article is not the demise of the company in itself, or the reasons that led it to the point where it is today. The most surprising thing is that although most of the people who work in or about the industry of multimedia can tell fairly accurately at least some of the reasons for Blockbuster’s problems, the people in charge of said company seem to have no idea – and they seem to not have had any idea for a long time.
When even the company’s CEO doesn’t acknowledge Netflix as a competitor and attributes Blockbuster’s financial problems to some kind of unknown source, we get a pretty grim picture of the shape and future of the company.
The simple truth is that Blockbuster is failing not because something inherently wrong in its product but for a somewhat different reason: it doesn’t have a product anymore – or, better said, its product is no longer relevant. In the age of speed and commodity, of instant streaming and information delivery, there’s just no way of being able to compete while still tied to old formats and philosophies. So the problem with Blockbuster is not (at least only) a problem with its service: it’s a problem with its lack of vision, and pure delusion. Contrary to what any of the former video giant will tell you, Netflix has definitely, even if by mere secondary effect, killed of all of their relevance and nearly all of their market.
But there’s something that simply isn’t right here – the words of Blockbusters representatives seem to disconnected from reality to be the truth. There is a fine line between optimism and delusion, and from the declarations of the company’s representatives i feel that it has already been crossed far into the wrong side, unless that’s just a part of some plan unknown to the general public.
But for what we know, the only thing that can be said is that Blockbuster, unless a radical change is imposed quickly and efficiently on their product and market vision, is going to have no choice but to file for bankruptcy in a very short time frame. And the biggest problem is that, even if the changes are made, and even if they are in the right direction, there still might not be any chance left for them.
Oh, and one more thing: even Netflix can’t rest assured of its continued success. If there’s anything to learn from the Blockbuster debacle, is that a company’s position can never be too solid. Even though Netflix seems like a strong player (the major player even) in the market of movie streaming, with good platform integration and a large catalogue, there are other companies that would love to take hold of a big chunk of that growing market, and I think that, with the right moves and products, they can. One company in particular, that in the last few years has always distinguished itself from the pack through innovation and aggressive marketing, seems to me as particularly interested and capable of taking on the movie streaming rental service. I’m talking, of course, about Apple – already a dominating company in online retail services, through iTunes and the App Store, a movie store (with perfect integration with the soon to be released new apple tv) seems to be the next logical step. And let’s not forget the powerful partnerships that Apple already has in this domain: most of the major media companies provide audio content for iTunes, and the legendary ex-ceo of Apple is one of Disney’s (and subsequently Pixar) major shareholders.
Blockbuster has definitely seen better days, but in the technology age a company that refuses to integrate and expand its services to new and attractive platforms is doomed to fail. Netflix has (temporarily?) taken the crown as the major player in the movie streaming business, but I eagerly await new developments that will, certainly, be a surprise to many.