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- Blockbuster initially underestimated the threat of online rentals and streaming as a whole, clinging to their brick-and-mortar model for too long. Maintaining these physical stores proved expensive, especially as customer traffic declined.
em360tech.com/tech-article/what-happened-to-blockbusterWhat Happened to Blockbuster? How Streaming Killed the Video ...
Jan 31, 2024 · Understanding why did Blockbuster fail boils down to several critical aspects. The emergence of Netflix, leveraging digital streaming, rendered Blockbuster’s physical video rentals obsolete. Failure in technology adoption and adapting to shifting consumer behavior further accelerated their decline.
- They Underestimated the Threat of Online Rental Services. When Netflix started offering DVD rentals by mail in the late 1990s, Blockbuster laughed off the competition.
- They Were Slow to Embrace New Technologies. Related to the above, Blockbuster failed to adopt new technologies quickly enough. The world was shifting from physical to digital media rentals, yet Blockbuster was still focused on its traditional in-store model.
- Their Business Model Had Expensive Overheads. Blockbuster’s traditional retail stores came with massive fixed costs. They had to lease thousands of large spaces, hire many staff to man locations, and maintain a huge inventory across multiple sites.
- They Alienated Customers with Late Fees. One of the biggest complaints people had about Blockbuster was their excessive late fees. You could end up paying more in fees than it cost to just rent or buy a movie!
Feb 2, 2017 · Failure to recognize timing: Blockbuster actually responded to all of its perceived competitive threats with similar models, but it was too late. It eventually tried a DVD-by-mail service, rental kiosks similar to Redbox, and put up its own website for online streaming after acquiring a smaller player in the field. [4]
Apr 4, 2024 · The company’s late entry into the digital market with its Blockbuster Online service failed to gain traction, hampered by limited selection and higher prices compared to competitors like...
Oct 21, 2024 · Blockbuster’s underestimated Netflix, dismissing it as a niche service. Businesses should never underestimate the potential of competitors, especially those with innovative business models.
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Mar 24, 2024 · By failing to acquire Netflix and underestimating on-demand streaming, Blockbuster fell farther behind digital-first rivals. Multiple factors compounded its downfall throughout the 2000s: Blockbuster Online launched in 2004, but high real estate costs meant uncompetitive pricing.
