Yep. Blockbuster had a lock on the old-style brick and mortar disc rental model. But upstarts like Netflix came up with a completely new way of doing things- rental by mail, and then a little while later, streaming video.
Blockbuster IMO, exhibited the typical arrogance and blindness of companies that dominate their particular business. My personal theory is that they get blinded because they get fixed on trailing indicators like sales/rental figures, profit, etc… and interpret those as proof that they’re doing well in a strategic sense when those indicators are good.
But when you’re dominant like that, it’s like turning the Titanic, in that until some tipping point is reached (seems to be very common in tech/innovative situations like this), the indicators look good enough, and the pressure to do something else or do something new isn’t there until it’s too late.
The writing was on the wall as far back as 2002-2003 for those paying attention. I think I’ve mentioned it before, but in MBA school in 2002, we wrote a paper for strategy class about how Blockbuster needed to adapt to changing trends- we got it a little bit wrong, in that we suggested they merge with Columbia House and take advantage of their mail-order channels, but we got it a lot right, in that we identified that Blockbuster’s current model was on borrowed time, and that mail-order or streaming was the wave of the future. In fact, we suggested that they only do the mail-order merger stuff as a stop gap until they could move into streaming full-bore and use their (at the time) ubiquitous branding as a way to drive awareness and adoption of streaming video and dominate that market.
That would have taken leadership at Blockbuster who weren’t entirely ingrained in the brick and mortar/rental mindset, and who would have believed that by the early-mid 2010s or so, streaming video would be THE thing. I’m not convinced that most fifty-something/sixty-something execs out there were or are necessarily that tuned in to technological and social trends in ways that would let them identify that far enough ahead of time to do something about it though.