Today news surfaced that Blockbuster was preparing for a mid-September “pre-planned” bankruptcy. To many of us, this may have been predictable. To others, like Blockbuster CEO Jim Keyes and chief digital strategist Kevin Lewis, the move may have come as more of a surprise.
What happened to the company, which was once the dominant player in video rental? In 1994, it was acquired for $8.4 billion; now, it’s valued at a mere $24 million. Where did it go wrong?
Many believe the company’s brick-and-mortar business hobbled its success. Others point out that its late-to-the-game by-mail and kiosk services lost out to Netflix and Redbox. And some theorize that its slim digital offerings, focused on pay-per-view rather than subscription streaming, sealed the company’s fate.
Ultimately, the company was simply doing too much. As I once phrased it to Jim Keyes, it almost felt like Blockbuster was boxing an octopus: battling Netflix for subscribers, Redbox for kiosks, and Apple and Comcast for on-demand service. How could they ever hope to win?
What do you think? Why is Blockbuster going bankrupt?
Moreover, when the company files for Chapter 11, how should it restructure? Should Blockbuster become an all-digital service? Should it focus on kiosks? Should it close down all of its physical stores?
As Blockbuster’s head of digital strategy Kevin Lewis explained, Blockbuster has a “long and attractive future,” but in “what form”?