The Death of Blockbuster Video

Remember Blockbuster Video? At its height, Blockbuster operated more than 9000 video rental stores across the world, but that very success drew new competitors into the video rental market. Brent Lang (@BrentALang) explains Blockbuster’s demise thus in this excellent essay: “In the 1990s and early aughts, the video rental chain loomed over the home entertainment market. Its rows of new releases and thousands of locations made it unrivaled, and its profit margins grew fat thanks to the exorbitant late fees it charged. But Blockbuster became complacent. Redbox and Netflix upended the business by offering cheaper, more convenient alternatives, allowing people to rent films at kiosks or have them delivered to their homes via mail or, eventually, streaming. In the process, consumers grew accustomed to paying only 99 cents a night for a movie (Redbox) or shelling out a flat monthly fee (Netflix). In a few short years, Blockbuster was a bankrupt anachronism.” So, how long will it take before Facebook becomes the next Blockbuster?

Image result for blockbuster video

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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4 Responses to The Death of Blockbuster Video

  1. Kathy H says:

    Technology is constantly changing. Companies must constantly look toward the future, adapt and change. Facebook could easily become another MySpace.

    • I agree that all firms (including Facebook) must adapt to changing conditions to stay competitive, but for better or worse, one built-in and huge advantage Facebook has is the fact that so many people are already on Facebook. Economists call this advantage “network effects” — the more people who already on Facebook, the more reason to stay on Facebook. That said, at some point, even if the number of Facebook users continues to grow or remain stable, the amount of time spent on the site may begin to decline …

  2. Abogada Guerra says:

    Good question and great reply to@Kathy H.

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