If only Blockbuster could rewind
back to the 1990s.
That was the time when the video
chain was the colossus of the movie-rental business, with stores in seemingly
every city shopping district and suburban strip mall in America. Visiting the
store was a weekly rite for many people, who would show up on Friday evenings to
check out the latest releases, navigating a crush of couples and families who
had exactly the same idea -- only to find out that the last copy of "Air Force
One" or "The Lion King" had already been snagged.
Read more at: http://edition.cnn.com/2013/11/06/tech/gaming-gadgets/blockbuster-video-stores-impact/?c=&page=3
1 - In
what measure has Blockbuster failed to understand that customers' needs were
changing?
2 - What is the panorama that the digital era is shaping for the movie entertainment industry?
1) We think that Blockbuster has not totally failed in understanding customer's demand, it is due to technology which has moved too fast with DVD's and the internet. Blockbuster knew that VHS wouldn't last forever and as a mentioned in the article, somebody was wondering that these stores still even existed until today. Even the change from VHS to DVD, which responded to the consumers's demand in a certain period, was not enough because Blockbuster didn't take into account the online market, where everybody can just download their required movie from the net, easy from the sofa at home. The internet demand turned out to be the biggest market, which Blockbuster couldn't reach for legal purposes.
RispondiElimina2) The video industry already realized that the traditional way of earning money by producing expensive movies, can't be as easily balanced than it did before, because most people are not buying their DVD's in stores anymore and also cinema visits are decreasing slowly.
Producers are more focusing on earning money through the internet, like for example by selling the movies on demand, meaning that you pay 2 or 3€ to watch that movie from your home.
PDF Management:
RispondiEliminaThey ignored the emergence of a disruptive innovation: the internet. They thought it was not a threat, but when the internet was developed and got more common in family houses, people changed their way of consuming movies and tv series. Movies were more accessible and also cheaper. The streaming business (e.g. Netflix) started out as a very innovative service, but now it has become the main distribution channel of movies and tv series. Blockbuster kept the process of renting a movie too difficult for their customers, for instance just being late with returning a movie would imply a fine of $40 while when you stream a movie your acces just gets denied and there's not really a possibility to get fined. Their main problem was that they were too focused on their current customers at that time and when they realised the market had changed, it was too late.
The change in technology has made customers appreciate the accessibility and low price. We think things like piracy and free streaming has had an effect on the willingness to pay of customers. The streaming companies will have to compete with this and adapt their strategies to the threat of piracy. However, it is a growing market and it will probably be the main distribution channel of entertainment in the future.
Exactly, BB has not been able to adapt to what was emerging as a radical innovation, as internet has been. I would say that BB has suffered rising competition in the industry, while struggling to understand that the shift occurred also in consumers' needs. On one side, Netflix, that initially offered a different service, proposing consumers DVDs by email, while BB offered DVDs in a rental environment, that by itself had its issues facing the changes in technology. On the other side, consumers, their needs, their wants and their subsequent demand, vital to be addressed.
RispondiEliminaAs you stated the entire industry has changed, new threats have emerged, and that's the lesson we again may learn. Just as for Blackberry, here it is key takeaway from Blockbuster's story: evolve or go extinct.
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