# Why wasn't Blockbuster prepared for online movie streaming? **URL:** \ **Category:** Factual Questions\ **Created:** [June 5, 2018, 3:54pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470 "2018-06-05T15:54:41Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Telemark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/telemark/32/372_2.png) [@Telemark](https://boards.straightdope.com/u/Telemark)\ **Post date:** [June 5, 2018, 4:54pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/21 "2018-06-05T16:54:28Z")
> [@TheSundial](#): > > Didn’t they hire people to plan for the future? The future is pretty easy to predict when it’s already in the past. ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [June 5, 2018, 4:59pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/22 "2018-06-05T16:59:30Z")
> [@Little\_Nemo](#): > > When the status quo is greatly to your benefit, your desire is to maintain that status quo. > > Smart companies enjoy the status quo while acknowledging that it won’t last forever and making plans for the changed future. But not all companies are smart; some ignore or resist change. But the change occurs anyway and they can then be overwhelmed by it. This is it. Certainly other mistakes can be pointed out, but this is what traditional corporate culture does. It’s reason Sears is going broke. It’s the reason I got an incredible deal on steel shelving at the Toys R Us close out yesterday. If you made a profit today then it’s considered risky to do anything different tomorrow, even though time and again it’s been demonstrated that companies that take no risk are likely to become obsolete over time. OTOH corporate management that takes risks and fails ends up looking for jobs. But there’s always someone at the top who has the responsibility for finding the balance between the status quo and risk. ---
**Author:** ![beowulff](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/beowulff/32/542_2.png) [@beowulff](https://boards.straightdope.com/u/beowulff)\ **Post date:** [June 5, 2018, 5:07pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/23 "2018-06-05T17:07:41Z")
> [@dolphinboy](#): > > Kodak went down the same path at Blockbuster. They actually had a digital camera ready to go but wanted to keep their film business going as along as possible. They completely missed the boat on purpose. This is much too simplistic. Kodak made the Quicktake 100 and 150 for Apple, which were arguably the first successful digital cameras, circa 1994. Kodak knew that digital was the future - they had the first professional DSLRs on the market. But, like so many companies, they couldn’t successfully transition to the post-silver era. If you want to watch this happening _right now_, witness the conflict between cable TV providers and their Internet division. Everyone knows how that is going to end, but still, the cable divisions keep doing exactly what they have always done - selling overpriced “bundles” with crap that nobody wants to watch. ---
**Author:** ![E-DUB](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/e-dub/32/403_2.png) [@E-DUB](https://boards.straightdope.com/u/E-DUB)\ **Post date:** [June 5, 2018, 5:09pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/24 "2018-06-05T17:09:27Z")
Tripolar mentioned Sears. With their history of the “Sears Catalog” making their customers used to ordering by mail, they could have been Amazon. But a lot of businesses are leery, and perhaps not totally wrongfully, of creating subsidiaries that compete with their mainline business. Robert Townsend called that “pissing in the soup”. ---
**Author:** ![MrAtoz](https://avatars.discourse-cdn.com/v4/letter/m/45deac/32.png) [@MrAtoz](https://boards.straightdope.com/u/MrAtoz)\ **Post date:** [June 5, 2018, 5:41pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/25 "2018-06-05T17:41:30Z")
> [@aceplace57](#): > > How many people remember the small local video stores that had at least one movie buff that would steer you to wonderful, older movies? My local rental store had a deep section of film noir. The owner loved that genre and often talked with customers. > > Quentin Tarantino famously had a video store job like that before he made it big in films. > > Blockbuster never offered that service. The staff never seemed interested in discussing films or making any recommendations. Once upon a time, it did. Or at least one store did. Much as I became a loyal Netflix customer almost as soon as I bought my first DVD player, I actually have very fond memories of Blockbuster. Return with me now to the fabled year 1992. I was just out of grad school, with my first adult job, in my first (crappy) apartment, in a city I’d never lived in before (Indianapolis). I didn’t know a soul in town, but there was a Blockbuster Video not far from my apartment. I used to _love_ going in there. It was quite a different place back then. It was a lot like those small local places that everyone talks about. It wasn’t just the wall-to-wall dozens of copies of the latest releases that we think of when we think of the stereotypical Blockbuster store. It had a good selection of classic films, a decent foreign film section, quite a few of the old serial cliffhangers, some good documentaries, some operas and classical concerts. It even had a section labelled “Le Bad Cinéma” (complete with accent aigu), which had stuff like _Plan 9_ and _Queen of Outer Space_, and other so-bad-it’s-good movies. And yes, it even had a few employees that you could talk about movies with, and who knew what they were talking about. I liked it a lot. I was sorry to see Blockbuster go. But that Blockbuster, the Blockbuster that was a refuge for a lonely film-loving kid living on his own for the first time, went a long time before the place actually closed down. It was replaced by the less quirky, more systematized Blockbuster that focused on stocking a million copies of the newest releases, and had maybe a token copy of _Casablanca_ as its “classics” section. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [June 5, 2018, 5:52pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/26 "2018-06-05T17:52:40Z")
> [@aceplace57](#): > > It’s ironic Blockbuster swallowed up the 80’s mom & pop video rental stores. > > Then they get wiped out by Netflix. > > The entire local video rental industry just imploded. It’s weird for somebody my age. I can remember back in the early eighties when video stores were as rare as they are nowadays. And then video rentals took off (once people decided to go with VHS rather than Betamax or Laser Discs) and you saw new video stores opening each month. So I got to watch the video rental industry both explode and then implode twenty years later. ---
**Author:** ![USCDiver](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/uscdiver/32/354_2.png) [@USCDiver](https://boards.straightdope.com/u/USCDiver)\ **Post date:** [June 5, 2018, 5:54pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/27 "2018-06-05T17:54:27Z")
Before Netflix expanded their streaming service, I actually subscribed to Blockbuster’s mail-order service instead because you could take your mail-order DVD back to the store and get a store-rental for free. That was their one big advantage at the time. ---
**Author:** ![Derleth](https://avatars.discourse-cdn.com/v4/letter/d/b9e5f3/32.png) [@Derleth](https://boards.straightdope.com/u/Derleth)\ **Post date:** [June 5, 2018, 5:57pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/28 "2018-06-05T17:57:50Z")
> [@Rysto](#): > > It’s not uncommon. IBM invented the PC, but refused to price them competitively for fear of cannibalizing their minicomputer sales. So instead they let Compaq et al. cannibalize their minicomputer sales. :smack: Moreover, they didn’t jump on the 80386 because that chip _definitively_ pushed PCs into the minicomputer-killer range in terms of position on the price/performance curve. The 16-bit x86 CPUs were nice (… as long as you didn’t have to program them yourself… ), and they definitely competed with some older minicomputers, but the 32-bit x86 chips turned the PC into something which could credibly be used as a server, a database system, or a workstation, _and_ they were being mass-produced in volume, as opposed to being relatively scarce and tied to expensive proprietary computer systems. IBM shrank in relative importance in the 1990s. A number of other computer makers died, or effectively died, in that period. ---
**Author:** ![Pantastic](https://avatars.discourse-cdn.com/v4/letter/p/3bc359/32.png) [@Pantastic](https://boards.straightdope.com/u/Pantastic)\ **Post date:** [June 5, 2018, 6:03pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/29 "2018-06-05T18:03:25Z")
People now forget or never experienced just how obnoxious and arrogant Blockbuster was, even when they were making money off of you. In the 90s I had a habit of renting a move or two to watch over a weekend, and would usually end up dropping them off a day late, and pay the late fee next time I went in. One time I didn’t rent any movies for a few weeks, and they sent me a letter threatening to take me to collections over the $2 late fee that I always ended up paying next time I went in. So I sent them a check for the $2 and switched how I watched movies (mix of a local rental chain and buying used DVDs for about twice the price of a rental). I would have been fine continuing to pay rental plus late fees, but not once they started making threats. While they made good money when they were big, they got a really bad reputation with customers with escalating late fees and aggressive collection techniques. Since they were convenient people used them a lot, but they really killed any general attraction people had to their brand, so no one was loyal to the brand. While being late to the online game didn’t do them any favors, the fact that their brand wasn’t liked also hurt their attempts to shift; if I have a choice between streaming service ‘new and unknown’ and service ‘obnoxious and full of gotcha fees’, I’m going to go with the first one. ---
**Author:** ![Chimera](https://avatars.discourse-cdn.com/v4/letter/c/8e8cbc/32.png) [@Chimera](https://boards.straightdope.com/u/Chimera)\ **Post date:** [June 5, 2018, 6:05pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/30 "2018-06-05T18:05:50Z")
Generally, businesses fail because the executives don’t understand technology, don’t put any time into understanding it and then make bad decisions based on ignorance and fear. Being in IT, I’ve seen plenty of companies shoot themselves in the foot by refusing to upgrade ancient, beyond support hardware and insist that we just keep it working. Sears was the Amazon of the early 20th century, but the Ayn Rand cockroach who owns it now was never interested in investing in it’s future, just gutting the corpse. Back in 1981, just as the first PCs were coming out, I worked for a company that sold and programmed CADO minicomputers. The owner was a sexist piece of shit who had already lost a sexual harassment suit brought by his ONE female employee. Then he made the timely purchase :rolleyes: of a company that sold electric typewriters. The entire female staff of the new company quit en masse, leaving him with the shell of a company (and no employees) selling something that was going to be obsolete within a year or two at best. IBM was the very poster boy for jumping into technologies in the 70’s to 90’s that their executive team didn’t understand or support, then abandoning rich markets for dumbass reasons. Likely the executive team of Blockbuster didn’t understand the technology and/or blew off the idea as cutting into their store sales. ---
**Author:** ![Derleth](https://avatars.discourse-cdn.com/v4/letter/d/b9e5f3/32.png) [@Derleth](https://boards.straightdope.com/u/Derleth)\ **Post date:** [June 5, 2018, 6:09pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/31 "2018-06-05T18:09:10Z")
> [@Stranger\_On\_A\_Train](#): > > IBM is the perfect example of this; they developed the PC but tried to restrict its usage to not compete with their mainframe business, and then competitors advanced PC and Unix workstation/server technology rapidly to the point that truck sized mainframes became obsolete in a matter of a few years. OK, define what you consider a ‘mainframe’, because the z Series (IBM’s mainframe line, lineal descendant of the System/360, LPARs out the ass, MVS and TSO… that thing) is definitely not obsolete in terms of being a very high-availability high-throughput system with serious process separation capabilities. The i Series (AS/400, rack-mounted, from the 1980s Future Systems project… ) arguably _is_ obsolete, but that’s midrange, not mainframe, and could reasonably be called a minicomputer if you’re Not IBM and therefore don’t use terms like ‘midrange’ to refer to computer designs. It’s true the mainframe is no longer the default computer design, but that’s how progress usually works: Mainframes got pushed to the role they’re most suited for, they didn’t get swept away entirely. Things only get swept away entirely when they’re like Williams-Kilburn tubes or mercury delay line memory, and have absolutely no redeeming features relative to new technology. Mainframes, as high-availability systems with extremely strong process separation capabilities, have redeeming features. ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [June 5, 2018, 6:10pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/32 "2018-06-05T18:10:47Z")
> [@MrFloppy](#): > > Edit: Someone beat me to it. Excellent answer to the OP! ---
**Author:** ![aceplace57](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aceplace57/32/3500_2.png) [@aceplace57](https://boards.straightdope.com/u/aceplace57)\ **Post date:** [June 5, 2018, 6:11pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/33 "2018-06-05T18:11:07Z")
Did Netflix rent vhs in the early days? I recall Blockbuster had vhs and dvd for a long time. Some of the older titles were only on vhs. ---
**Author:** ![Andy\_L](https://avatars.discourse-cdn.com/v4/letter/a/c67d28/32.png) [@Andy\_L](https://boards.straightdope.com/u/Andy_L)\ **Post date:** [June 5, 2018, 6:18pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/34 "2018-06-05T18:18:49Z")
“The Innovator’s Dilemma” [The Innovator's Dilemma - Wikipedia](https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma) covers this kind of issue in detail. Companies can innovate with new technology, but have a hard time dealing with a new kind of value to the customer. All the rewards to employees and managers go to those who are improving things in recognizable ways - while a small company is finding a dissatisfaction that hasn’t yet been recognized. So the Blockbuster manager making great deals to get the latest movies on their shelves at low prices, or to accurately predict how many copies of Kickboxer 4 is needed at each store to satisfy the customer, or starts selling popcorn at the checkout counter is innovating (and probably making the company a lot of money) in the recognizable DVD market - while Netflix is appealing to a few people who live out in the country, or hate crowded stores, or like the kind of obscure movies that never show up at Blockbuster - but Netflix happens to be setting itself up for the next growth industry, by having a business model that naturally can grow into a streaming service. ---
**Author:** ![senoy](https://avatars.discourse-cdn.com/v4/letter/s/dbc845/32.png) [@senoy](https://boards.straightdope.com/u/senoy)\ **Post date:** [June 5, 2018, 6:21pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/35 "2018-06-05T18:21:49Z")
Blockbuster WAS prepared. Carl Icahn wasn’t (Icahn is a so-called ‘activist investor’ which basically means he’s rich and likes to buy up companies and force them to be run as he sees fit. He bought 191 million worth of Blockbuster stock so controlled the company), so he booted the CEO who was making the pivot to streaming and hired one of his own guys. Icahn was an idiot who didn’t understand the market and valued short-term gains over long-term stability. He thought the amount of debt taken on in order to go full streaming was too much, so he preferred bankruptcy. Honestly, if Icahn weren’t an idiot, there’s no reason to believe that Blockbuster wouldn’t have eventually won. ---
**Author:** ![markn\_1](https://avatars.discourse-cdn.com/v4/letter/m/f9ae1b/32.png) [@markn\_1](https://boards.straightdope.com/u/markn_1)\ **Post date:** [June 5, 2018, 6:30pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/36 "2018-06-05T18:30:04Z")
> [@Chimera](#): > > Generally, businesses fail because the executives don’t understand technology, don’t put any time into understanding it and then make bad decisions based on ignorance and fear. I don’t agree with this. Undoubtedly it happens, but in my experience tech business failures are more often due to failing to predict market factors accurately. I’ve worked for a couple of dozen high tech companies in my career, and almost all of them failed. But I can’t think of one that failed because the e-staff didn’t understand technology. Usually it was because they thought there was a bigger market for a product than there actually was, or that consumers would pay more for a product than they were actually willing to pay. For example, I worked for 3DO, a company that made a high end video game console in the mid 1990s. It was a technically awesome machine, with features far ahead of its competitors. The company certainly understood the technology and was totally on top of the latest chips that could make the product better. What they didn’t appreciate was that consumers mostly didn’t want to pay $700 for a console when they could get one from a more familiar name (Sega, Nintendo) for less than half the price. Later I worked for ReplayTV. Again, the company was totally on top of the technology. What they didn’t appreciate was, again, how much consumers would be willing to pay for their product, and in this case, the legal troubles they would get into with media companies by implementing a feature to automatically skip commercials in broadcast TV. I have no doubt that Blockbuster considered the streaming business. They may have looked into it quite deeply. But a company whose main business is buying tapes and DVDs and renting them out isn’t really in any position to implement a full video streaming infrastructure, which is an absolutely ENORMOUS undertaking. It requires software and hardware engineers, network specialists, and a host of other technical expertise that Blockbuster previously had no use for. It would have been a major investment just to hire the appropriate staff, not to mention the infrastructure cost. They had to make the decision about whether it was worth the risk. They clearly made the wrong decision, but hindsight is 20/20 and there’s no way they could have been sure about the future course of the streaming video market. ---
**Author:** ![Akaj](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/akaj/32/145_2.png) [@Akaj](https://boards.straightdope.com/u/Akaj)\ **Post date:** [June 5, 2018, 6:31pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/37 "2018-06-05T18:31:48Z")
Is Netflix itself now ripe for a disruptive challenger taking market share? Netflix essentially killed Blockbuster by offering the same thing (movies) in a better way – cheaper, bigger selection and (once it began streaming) much faster. But since then, Netflix has evolved into more of content creator, and their selection skews heavily toward series (both self-produced and licensed). That’s all fine, to a point. (I’m a happy subscriber myself.) \*\*But what if you want to watch a movie? \*\*Almost nothing from the big screen makes it to Netflix anymore (reportedly because the studios now view Netflix as a competitor). So a new streaming channel offering recent movies for a flat monthly fee could probably take a big bite out of Netflix. ---
**Author:** ![Hampshire](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hampshire/32/4887_2.png) [@Hampshire](https://boards.straightdope.com/u/Hampshire)\ **Post date:** [June 5, 2018, 6:32pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/38 "2018-06-05T18:32:37Z")
They say that Netflix killed Blockbuster and maybe it’s just me but 9 out of 10 movies I search for on Netflix just aren’t there. Blockbuster would have always had these for rent. I assume you just use the “search” function on Netflix and type in the movie? I couldn’t find Bill & Ted’s Excellent Adventure or Bogus Journey, Psycho, Mad Max, Ghost, Groundhog’s Day, Point Break, Star Wars. Am I doing something wrong or is the selection on Netflix that piss poor? ---
**Author:** ![Akaj](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/akaj/32/145_2.png) [@Akaj](https://boards.straightdope.com/u/Akaj)\ **Post date:** [June 5, 2018, 6:35pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/39 "2018-06-05T18:35:40Z")
> [@Hampshire](#): > > 9 out of 10 movies I search for on Netflix just aren’t there. Blockbuster would have always had these for rent. Pretty much what I said one minute earlier! ---
**Author:** ![E-DUB](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/e-dub/32/403_2.png) [@E-DUB](https://boards.straightdope.com/u/E-DUB)\ **Post date:** [June 5, 2018, 6:39pm UTC](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470/40 "2018-06-05T18:39:38Z")
And if Blockbuster didn’t have the particular movie, the surviving mom and pop might. [Previous page](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470.md?page=1) [Next page](https://boards.straightdope.com/t/why-wasnt-blockbuster-prepared-for-online-movie-streaming/815470.md?page=3)