At one point owned by Viacom and valued at billions of dollars, Blockbuster was on top of the world for a while, the dominant force in the home video marketplace. It flexed its muscle by refusing to carry certain titles, raising the ire of many videophiles who wanted more than just the mainstream films that were box-office hits.
Blockbuster began to show chinks in its armor with its slow adoption of DVDs as the medium of choice by customers. And it totally underestimated the power of Netflix. Now, Blockbuster is feverishly trying to play catch-up, offering its own movies-in-the mail service.
But is it too little too late? Blockbuster's brick-and-mortar stores are closing at a rapid pace and the company is on the verge of liquidation to pay its debt. Threats of bankruptcy have been in the news for months.
Netflix continues to be an innovation enterprise, looking for ways to extend its business model to New Media, adapting with the times and meeting the needs of their audience base, seemingly one step ahead of viewer habits. Blockbuster, on the other hand, seems reactionary, one step behind, trying to stay alive by playing copycat to Netflix's mounting successes.
Blockbuster is quickly becoming a case study in the quick rise and even quicker fall of major corporations. Read this excellent article in Forbes magazine called "What Blockbuster Can Teach Us About Economics."
Compare Blockbuster's stumbles to the proactive choices made by Barnes and Noble Booksellers who themselves were vilified for squashing small independent book stores. But where Blockbuster was slow to alter the status quo, Barnes and Noble jumped into the deep end of ecommerce, building an online extension, BN.com, to compete head-to-head with Amazon.com and even coming out with the Nook e-reader to counter the Kindle. If Barnes and Noble ever fails, no one can claim it was for lack of trying. Blockbuster, on the other hand, has its own lack of foresight to blame.
I have written before about the demise of physical retail stores that are too slow to embrace the opportunities of technology. Blockbuster Video is a prime example of what can go wrong. We'll see if the once venerable business has a second act up its sleeve.