02/21/2011 09:22 pm ET Updated May 25, 2011

Blockbuster: Time to Call it Quits


At one point, Blockbuster used to be the go to place for renting videos. Although their collection was fairly limited, it was the only big player in town. The transition from VHS to DVD was easy. Same content on a different physical medium. Recently, despite desperate attempts, the company has failed miserably to transform from the physical generation to the online generation.

Of all the physical media businesses (books, music CDs, etc.), Blockbuster should have seen it coming a long time ago.

iTunes became popular.

E-books came onto the market.

People started renting DVDs online.

So why did a company the size and negotiating power of Blockbuster not do anything? They continued to rent DVDs at almost double the price of their nearest competitor, had ridiculous late fees and failed to form partnerships at a time where every medium was going digital.

They should have predicted it by looking at CD sales. They did not. They should have learned from Netflix's model. They did not. They should have come up with a streaming model. They did not.

When Hulu, a startup, has come so far in the past 3 years, it's baffling why a multi-billion dollar organization failed to sign any deals with their long-term content partners.

Out of everyone remaining in the current playing field, Blockbuster had the best leverage -- content. Comparatively, Netflix and Hulu are newcomers.

As someone who used to visit Blockbuster quite frequently a few years ago, it's still shocking to see that the company hasn't learned. Their retail stores are packed with junk and there's no ability to request content that isn't in store. Even free public libraries have that feature.

As one of the leading forces of content less than a decade ago, why didn't Blockbuster partner up with hardware manufacturers to leverage a full-fledged streaming service?

Nearly every new device today has Netflix. Hulu is also striking deals at a rapid pace. So, why didn't Blockbuster?

Over the past 3 years, there has been no improvement in how Blockbuster operates and what it offers. In the digital space, that's an entire generation.

As much as Blockbuster enjoyed its past, it's time to pack up. A company that can't innovate or experiment is a company that consumers don't want.


Aanarav Sareen is a content creator and digital media consultant. He blogs at Digital Media Business and publishes the monthly Digital Media Newsletter. He's also the host of the weekly Digital Media Podcast.