While Blockbuster Falls, Netflix Rises

by on April 27, 2011

in Entertainment

netflix blockbuster‘Blockbuster’, The Video Store That Never Kept Up

As the internet has changed how business is done, so too, has business changed the medium of entertainment. With retail, huge retailers can still retain hard locations and stay viable while they can also offer their merchandise online. Regardless of what it is.

Sears has huge stores, but everything can be bought online. Safeway has stores, but you can buy food online and have it delivered. Alas, Blockbuster went bust because they did not keep it modern enough, fast enough.

In its prime, Blockbuster held 5,700 stores to rent DVD’s out to the world. But then Netflix came along and suddenly a different business model was available. A business model where someone can order a movie and have it show up at home without going out of your way to get it. Then of course, there’s the online streaming the Netflix is also providing.

While there were some changes that needed to be made by all… retailer and consumer alike, the consumers started to see the way along the path of having product delivered to them. They also started looking at their computers more for their entertainment venues. And slowly but surely, people were starting to appreciate the premise of downloading and not handling DVD’s and such.

NetflixAnd this, IMO, is what precipitated Blockbusters downfall. The changing business-scape and not keeping up or not marketing properly or their inability to distribute resources where they needed them.

As it stands, when Blockbuster filed for Chapter 11, Dish Network swooped in and bought up the place for $228M in cash. They’ve released all but 500 stores, and now they go forward. But as what?

Do you think Dish Network will use these store fronts to remove the middle-man and sell their gear, along with video rentals? Will it now be a front for that and online rentals? Who knows. It would seem odd to drop that kind of cash on a dinosaur sinking in the tar pit, but it looks like that’s just what they’ve done.

There must be something more to what is underneath the obvious mask of Blockbuster. I guess time will tell what Dish Network has in mind!

In the meantime, in case you had not heard, Netflix is still doing things right. CNN Money reported that “Netflix’s global subscriber base grew almost 70% over the past year, to 23.6 million users.” and that gives it more subscribers than who is called the largest cable provider in the U.S.. And they’re not stopping there. Netflix is also starting to create its own entertainment content, the first show, with Kevin Spacey, will be called House of Cards.

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