Open Thread: How Could Blockbuster Reinvent Itself to Become Relevant Again?

After succumbing to bankruptcy under its $900 million debt, Blockbuster has started a search for a new CEO. Its embattled chief executive Jim Keyes, who failed to keep pace with digital competitors such as Netflix, could be replaced before the year's end. Who should Blockbuster replace him with? And, more importantly, how should the company re-make itself?

While Blockbuster is still considering keeping Keyes in his current capacity, sources told the Wall Street Journal that he "won't be running it much longer" and that "there is going to be a real search here." People familiar with the matter say the company's new CEO would need expertise in digital content delivery, with potential candidates including former Amazon, Google, and Yahoo execs.

Central to the selection process must be a new company direction. Keyes attempted to do too much with the company, and took on too many competitors: Netflix for subscriptions, Redbox for kiosks, not to mention Apple, Amazon, and Comcast for its on-demand service. The company also suffered heavily under Keyes' stubborn commitment to its bricks-and-mortar business, which became unviable in the digital age: Customers wanted access to movies on their iPhones, iPads, Nintendo Wii's and Xbox's. Driving to the store became archaic and unsustainable.

To emerge from Chapter 11 bankruptcy, Blockbuster must undergo serious restructuring. What should it return as?

Here's one suggestion: Farhad Manjoo recently recommended that Netflix and Hulu merge, but how about Blockbuster and Hulu? If Blockbuster shutters its thousands of stores, its vast DVD inventory could provide Hulu with a by-mail service to rival Netflix's and make its $9.99/month premium service far more appetizing. Hulu CEO Jason Kilar could become head of the merged company.

Sound crazy? To succeed, Blockbuster must reinvent itself. So get creative, Fast Company readers: tell Blockbuster what to do next.

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6 Comments

  • Sean Peek

    Blockbuster should be bought (merge) with Facebook. It would be another app on Facebook (such as all the games we waste time on). $8.99 monthly subscription for movies right on Facebook. You can share clips, share what your watching and why, etc, etc.
    Physical DVD rental will be a small niche market in the next 5-7 years. Netflix has seen that and so have moved to streaming. The profit margins are higher with streaming because there are no physical disc, no mailing cost, no replacement cost.

  • Steve Congdon

    Great idea! Love the idea of them getting together. Blockbuster could become a Zynga - relying on FB for distribution. Sean, you nailed it when you said "sharing."

  • Bruce

    They will need to partner with someone in the IPTV, or OTT set top space. Someone who can benefit from the familiar brand name. That's all Blockbuster has of any value...a great name.

  • Benjamin Francis

    Even the delivery of DVD's via Netflix service is becoming obsolete. As people become lazier and further drones to their technology they are not even going to want to walk to their mail boxes. They want instant access from the tv in the living room or their smart phones. A merger with Hulu would definitely expand their collection and give Blockbuster a crutch to reimmersion, but digital media is the future. Blockbuster needs to find it self in television based applications, streaming movies or shows, in the next few years or their staple name will fall to the way side. Although a revolutionary break through of technology would launch back into the forefront, as it would any company, they need to be able to keep up with current trends and use current technologies to their advantage rather than being stubborn in their brick and mortar. Possibly a Blockbuster subscription that allows unlimited rentals through their boxes, online streaming, and television apps would allow them to catch up.

  • Amber Hauptman

    They need to become more innovative or disappear... no company should exist just because it has been around for a long time. That's like saying we need to continue to put more money and jobs in the oil and gas sector.... it's counterproductive and adds inefficiencies in a market dying for some innovation.. and no, I'm not talking about 3D, your too late for that Blockbuster....
    How about smell-o-vision, I know I was promised that as a child, but still seem to be waiting on someone to actually take lead.

  • Eli Awtrey

    If Blockbuster wants to thrive, and not just survive like it has been trying to do for the past decade, it's going to need to shake up the market in a disruptive manner similar to Netflix...no real idea what that looks like, however.