So farewell then, Blockbuster. Theirs is a cautionary tale of what can happen to a business if it fails to pay attention to technological trends.

When I bought my first DVD player in 1998 (as soon as all the major studios had signed on to support the format), I would periodically go in to my local Blockbuster to see if they had any DVDs for rent yet. The answer was always the same: No.

Eventually I heard about a company called Netflix. They were stepping into the gap left by movie rental stores, and offering DVDs for rent. Not having a network of stores, they did everything by mail. It wasn’t exactly ideal having to plan ahead, request discs online and wait for them to turn up; but it was worth it to get DVD quality rather than VHS.

Still, I kept going back to Blockbuster periodically to see if they had started renting DVDs yet. I think it was some time late in 1999 that my local store actually started carrying DVDs, and it was an anemic selection of cropped (“pan-and-scan”) versions of mainstream movies. Apparently they hadn’t done their market research, and thought this whole DVD thing was a minor fad amongst movie geeks.

By now I was used to Netflix, who stocked pretty much everything released on DVD, in the proper uncut widescreen versions. So before long, I gave up on Blockbuster. I’m sure a lot of other people had the same experience.

That alone probably wouldn’t have been enough to kill Blockbuster, though. The second mistake they made was ignoring the Internet. Netflix launched video streaming in 2007, Blockbuster again launched their offering 2 years too late, in 2009. summarizes succinctly.

Meanwhile, in 2004 Redbox started offering movie rentals from automatic robotic kiosks in fast foods restaurants, convience stores and supermarkets. Lower overheads meant lower prices, and the ability to put machines in places people were going to go anyway meant more convenience. Blockbuster had already lost the movie geeks to Netflix, now they started losing the casual viewers to Redbox. Again they ignored the technology for years, only launching their own kiosk system in 2010, 6 years too late.

As late as April this year, Blockbuster’s CEO was still mocking the idea of online rental and suggesting that Blockbuster was a vital entertainment destination, saying:

Here’s an analogy: If I want to buy an obscure book title, I’ll go to But if I want to browse and see what’s new, I will go to Barnes & Noble.

This shows just how much he fails to get it. Blockbuster was never the place to go browse to see what’s new. Their selection was always heavily biased towards the most popular Hollywood output; it was the place to go to see what had been popular in movie theaters a year ago. Frankly, if I want to know that, I can go to IMDB. It’s just not a compelling reason to get in the car.

So now Blockbuster is in Chapter 11. I won’t be surprised at all if they proceed to Chapter 13, because they offer no significant value any more. Would you invest in a business renting music CDs? They used to exist, back in the mid 80s, but it’s a dead business model now, as dead as Blockbuster’s is about to become.