We all know the axiom that “all politics is local” — well, in the days of the Internet you can pretty much fill in the blank. In the case of Blockbuster you might say: “All quality is local,” or “All entertainment is local.” Too local, maybe. How is it possible for a company — a brand — to lose the entertainment foothold, to lose the living room of millions of consumers, and just fade away?
Blockbuster was an entertainment staple when it was first conceived in the 1980s, and it remained a go-to source for movies into the new millennium. Yet, it appears to be the end of an era for the one-time video giant. Dish Network Corp., which bought the brand in 2011 as it was approaching bankruptcy, now plans to close its 300 remaining retail stores by early 2014.
At its pique of success, Blockbuster was a booming and lucrative franchise, allowing consumers to rent movies to watch at their leisure – a cheaper alternative to purchasing video tapes or heading to the theater.
Yet, the advent of DVDs posed a danger to Blockbuster. While they were able to adapt to the times, offering the new format alongside VHS, the more compact DVD allowed for Netflix to enter the ring with its affordable and innovative mail-order rentals. (A company founded in the mid-80s called Video Mailbox attempted this with VHS, but it never took off in quite the same way as Netflix, which benefited from the ease and convenience of the internet.)
With Netflix, consumers could order their rentals from the comfort of their homes, avoiding lines and the disappointment that came from venturing to the store only to find that all copies of the film you wanted had been already rented.
While Blockbuster eventually offered a similar service, the addition seemed to come too late to ever pose a real threat to Netflix – which continued to grow with digital offerings available to watch instantly and the recent addition of original programming.
Dish paid $234 million to acquire Blockbuster and has tried a variety of approaches to breathe new life into the fledgling brand. While Blockbuster has yet to become a threat to Netflix, with the closing of its remaining retail stores, Dish solidifies its goal of moving predominantly into the realm of digital.