When not on time change: The case blockbuster

In 1985, a Dutch businessman named Wayne Huizenga opened a small shop in Dallas movie rental called Blockbuster.

A few years later we could speak of an entire industry with 8,900 stores, 90,000 employees in 25 countries with billings reached the 11,820 million dollars.

In the 90’s ambitious growth plans they presented according to a market that did not stop growing. The business model seemed simple and replicable 100% for almost the whole world geography. Settlements were made up of about 10 people experts in film and video games segmented promotions for days.

When not on time change The case blockbusterWhen Blockbuster went relatively good times in 2000, and there was a clear threat of online and Internet piracy in general, it emerged the possibility of buying a startup called Netflix selling monthly online subscriptions and allowed with the quota rent all movies that you want. Finally, the high command decided not to execute the purchase was around 50 million dollars. Perhaps they should consider these key points in my humble opinion:

  • The customer used to watch movies, do you prefer? Pay for each movie you rent or make a single payment and have an open bar?
  • The customer wants to move to the video whenever you want to rent?
  • It was possible that the movie we wanted to see is no longer available?
  • The customer is happy when failed to return the movie on time and charges you drop it?
  • How much area is needed to expose the entire film catalog with their respective structural costs?
  • In America, Local 3500 ran this is enough for all inhabitants have a blockbuster nearby?

It is true, that has not disappeared not too tech market renting and want to see the movie on your television screen but seeing the evolution,  it was a matter of time that the Internet burst with force and change the rules of the game and habits of viewers home theater.

Today Netflix is valued at 8,500 million dollars and Blockbuster went bankrupt with a debt estimated 1460 million dollars . Paradoxes of fate, Netflix has been one of the main actors in a film with melodramatic character in a startup that could be purchased practically throwing the market just a slumbering giant.

To all this, though a bit late, Blockbuster hired Accenture for its “Blockbuster online” but it knowing that its main competitors brought him much advantage in a market segment in which they are not experts.

This story, like many others such as the Kodak also arrived on time and began closing in 2013, make us think that you can not let our guard down even when we have the tailwind .There are always new trends and consumer habits may change by demanding changes and rearrangements of successful business models that were successful but who may be unprepared for the new times.

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