This post originally appeared in Business Insider
Video rental chain Blockbuster, owned by Dish Network, announced yesterday that it will shutter its 300 remaining U.S. stores. This closure puts an end to what must rank as one of the most precipitous falls from dominance to irrelevance that has been seen in some time.
In 2004, as it prepared for a spin-off from owner Viacom, Blockbuster was a juggernaut with 9,000 locations. By 2010 competition from Netflix and others had forced it into bankruptcy (and an ugly, challenging bankruptcy at that). Now, less than 10 years from the date of its spin-off, the company that defined the U.S. video rental market in the 90s will be gone, with the name living on in a few assorted Dish offerings only.
There are few better illustrations of just how fleeting strategic advantage truly is in a dynamic market. Blockbuster’s day in the sun was long, but the company was blinded by its success and failed to see the ways in which Netflix and other competitors cut at the very heart of its value proposition. By the time Blockbuster management recognized their error, it was too late.
And now a brand that rose to prominence by giving consumers more control over their viewing options has been put to rest, killed in part by a failure to see that the video rental store itself was at best an intermediate step toward our current on-demand offerings. Blockbuster had the resources and the brand to make the leap, but not the vision. There is a lesson in Blockbuster’s failing for us all.