I dont think anyone has mentioned torrenting/filesharing as a reason for the demise of BB and local video stores. It eliminated for many mostly younger people the need to both rent and/or buy media.
It’s an older story/happened many years ago when ‘geeks’ weren’t held in such high regard. Nothing like the 80s though…there was NO positive associations with geeks back then. I usually point to a scene in the Wargames where Matthew Broderick goes and sees 2 computer experts. People today assume the scene was played for comedy but back then it was not…that was a serious scene which showed how socially inept, weird and dangerous those geeks could be.
Imagine that you are running a successful auto body shop. You’re settled, profitable, and your workforce is well trained and skilled. One day, a consultant tells you that auto body is a limited industry, and you need to pivot to being a nail salon if you want to remain viable.
Even if the consultant is right, I can forgive the business owner for ignoring the advice. A pivot like that either means destroying the successful business you’ve built by transforming it into a completely new thing, or creating a second business from scratch alongside the first.
This is what happened to Kodak. They pioneered digital imaging, they knew what was coming, but a ship that large can’t be turned easily, and the executives who would have had to make the changes would have been rendering themselves and everything they had built over decades obsolete. Not an easy thing.
Yeah. As I mentioned above, Blockbuster made a lot of its money at stores - from all the stuff that people bought while renting movies (popcorn, copies of movies people purchased vice renting, etc.). To switch to Netflix’s mailing model (even before the streaming stuff) meant cutting into Blockbuster’s profits for popcorn sales (etc.) - and that’s a hard sell.
It’s been mentioned, and the timeliness don’t quite match up. Blockbuster behan to collapse collapsed before people had enough bandwidth to download movies. Music, yes. But movies weren’t really feasible when we were mostly on dial-up.
I think Blockbuster’s relationship with studios was probably a liability. Blockbuster developed good relationships with the studios by giving the studios a piece of every rental. If Blockbuster translated that relationship to streaming, Blockbuster would have had to pay studios revenue every time someone streamed a movie, which would have made an unlimited streaming service, like Netflix, too expensive for Blockbuster to offer.
Blockbuster could have tried to cut the studios out of the streaming revenue but that would have killed their good relationships. And then, they would have faced the same issue that Netflix did - the licensing rights for films and TV were escalating so quickly that it was outpacing the increased streaming revenue. And they would have been playing catch-up with Netflix in building a subscriber base so they never would have had as much for licensing fees…
Netflix has been a remarkable business success despite going through three major phases in roughly 25 years that would have challenged almost any company. First, they were a technologically sophisticated logistics company that could acquire, sort, store, retrieve, mail and reprocess physical DVDs quickly and cheaply, while operating a stable and safe internet shopping website (that was not trivial in 1997). Then, they were an innovator in streaming video and machine learning recommendation algorithms, which helped to keep people engaged in the service and allowed them to pivot away from all those warehouses and postal contracts. They still run that business but they are now one of the biggest movie and TV distributors and producers, acquiring and making content in countless countries. The truth is, there is very little about their DVD-by-mail business that would have pegged them as a leader in streaming video and almost nothing about their streaming video business translates to film production (although their insight into viewer’s preferences would have informed them about the value of the content licenses they acquired). Their success is remarkable.
This is also true.
This was certainly true once but with so many streaming competitors, I am certain they care a lot now about retaining their existing customers too.
I think I’ve mentioned this before but Sears didn’t really have a chance to be Amazon. Sears’ catalog operation was losing a lot of money and the money they would have needed to invest in internet sales would have far exceeded revenue for many years, probably more than a decade. Someone would have cut off the spigot before then.
If BB tried to pioneer streaming, I doubt it would be a subscription model like we see today. They would most likely try to have streaming be a rental model similar to their stores. You would pay $ and have 24 hours to watch it. That likely wouldn’t have produced the streaming revolution we see today. Netflix could still come along with $/month for unlimited streaming and be successful. There’s a chance BB would notice the success subscription streamers were having and pivot to subscription in a big way, but I doubt that the BB company back then would be able to pull it off.
And the early days of streaming were pretty clunky. Here are two ways that I remember:
- If you had a Tivo, you could rent movies from Amazon. You would select a movie and then it would be slowly downloaded to the Tivo sometime over the next few hours. (Remember, back then bandwidth sucked and was insufficient for live viewing). The movie would stay on the Tivo for 24 hours and you could watch it like a normal recording.
- If you had a Wii, Netflix had a Wii DVD that could do streaming. The Wii would act like a streaming device. I remember being able to watch live. I guess by that time bandwidth was sufficient and the movie didn’t need to be buffered.
Back then, computers and bandwidth weren’t really the greatest for media streaming. Most households didn’t have the necessary connection or hardware to do streaming. The startup companies were able to get a toehold with clunky solutions because the big companies didn’t see it as a profitable market. Then by the time the big companies saw the light, the startups had already gained a big chunk of the market. BB was a staid and sluggish company. I don’t really see that company being innovative enough to shape the streaming market.
I was actually thinking more along the lines of exclusive access- either for a time period, or absolute. Like Blockbuster Online (or whatever it would have been called) would have exclusive rights to stream movies for some period after it left theaters, for example. That’s the sort of thing Blockbuster might have been able to negotiate with studios without necessarily having to have per-stream tracking and payments.