Netflix vs. Blockbuster

[mithrilG60]

Originally Posted by andysutherland

I have both Netflix and Blockbuster accounts. Right now Netflix wins hands down with me. I don't have a local Blockbuster to return movies to (and neither will anyone else in the world after the end of this year according to some sources).

My understanding of the situation Blockbusters' in is that it's only the US parent that's in trouble, and that trouble is a direct result of not being competitive against services like NetFlix and RedBox combined with the punishing billion dollar debt they incurred under the terms of the spin-off agreement that was signed when they left the Viacomm parent. In many places in the world, including Canada, Blockbuster is still a very profitable company. In fact it's the revenues being clawed back from the Canadian division that's currently keeping Blockbuster alive in the US.

Blockbuster's problem is that they've never had a particularly dynamic vision or good future trend predictions. I worked at a Blockbuster location during university in the mid to late 90's and I can remember a MASSIVE corporate resistance to adopting DVD. They were convinced that it was a "fad" that would never catch on because players were too expensive and all releases were already available on VHS and everyone had a VCR. It wasn't until fully 2 years later, after which every other major rental chain in Canada had already replaced almost half their inventory with DVD, that Blockbuster decided maybe in it might be an idea to start embracing DVD's. The same process is now being repeated with BluRay, although to be fair (from the outside), it doesn't look like they're fighting the switch to DVD as much.

In Canada we don't have access to streaming services like NetFlix or Hulu, which partially explains the company's continued success, but Blockbuster needs to find a new business model. I can't remember the last time I wanted to actually drive to a physical location and pay an inflated fee for something I just need to drive back to the physical location when I'm done with it. A high speed internet connection is a standard basic service just like a phone line and physical media is basically dead (it just doesn't know it yet)... company's like Blockbuster need to find a method of renting electronic copies that allow customers to play them back on a variety of devices. Learn from the iTunes model, charging small(er) amounts for digital copies is FAR more profitable than trying to sell or rent conventional physical media.