Goodbye to an Era as Blockbuster Collapses, Closes Remaining Stores [Berkshire on Stage]

November 19th, 2013, 10:00 am by Sara

Blockbuster: An era ends

Opinion by Larry Murray

If ever there was a rapacious, greedy corporation,, Blockbuster fills that bill. Competition is one thing, but when gargantuan Viacom bought the Dallas-based Blockbuster video rental chain in 1994 for $8.5 Billion, they went to work to close just about every mom and pop video rental store by cutting deals with the studios (like revenue sharing) that the little guys couldn’t touch. They are, or were, the WalMart of the video world, growing to 9,000 Blockbuster stores by 2004, and as such they controlled what you and I could see, refusing to carry most independent, gay or controversial films that did not meet their rating standards. When Netflix began its DVD rental by mail program, Blockbuster saw a threat and tried to underprice this new competition, but found out that pricing was not the only consideration of us renters. Turns out that Blockbuster did not know the first thing about selection and service.

At Blockbuster you might get DVDs slathered in peanut butter and jelly from the kids manhandling the discs that never seemed to get clean, At Netflix, if you had a defective disc, they would send a replacement instantly, even before receiving the old one. Blockbuster treated you like you were trying to pull a stunt.

The story of Blockbuster is really a story of corporate greed, as the chain was bought and sold for its cash flow in the early days, and its brand name in recent years. But the truth is the financial geniuses never knew the first thing about what consumers wanted – or cared much, either.

Click to read the rest at Berkshire on Stage.

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