Blockbusted
It was announced today that troubled movie renter Blockbuster offered to buy troubled gadget seller Circuit City.
Never mind that analysts are scratching their heads on the economics, I’m intrigued that this signals a rapidly approaching new era of on-demand cocooning. This is just another sign of change that Blockbuster started twenty years ago.
I grew up in Raleigh with only a handful of big movie houses. One was The Cardinal Theatre. With two huge screens, great concessions and midnight showings every weekend, it was always packed. Sometime around the early 1990s, The Cardinal Theatre was replaced with…wait for it…a Blockbuster. It’s sadly ironic isn’t it? After all Faith Popcorn told us cocooning was the new wave back in the 90s.
My, how things progress. “The deal is a sign that Blockbuster doesn't have confidence in the retail video rental business anymore, says Shahid Khan, a partner at IBB Consulting. The movie rental store business is officially dead.”
The Blockbuster that replaced The Cardinal was closed a few years ago when the chain began facing online competition.
If designed correctly, the merger could result in a new customer experience for both companies. The new “CityBlock” or “CircuitBuster” has a chance to reinvent itself in a way that satisfies the entertainment buff in everyone. I just hope they understand that today’s retail environment HAS to be about the experience. Customers have easy online alternatives.
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After years of paying late fees, I switched to Netflix and never looked back. Now Netflix is offering movies on demand (to PC users only - for now).
For better or worse, we are moving toward a world where people can watch what they want, when they want, and where they want, without leaving their home. If this new merger doesn't fully embrace this new mode of consumption, then it'll be doomed.
This merger could give new life to Circuit City. The chain was fighting a losing battle against Best Buy and was doomed to eventual bankruptcy. Blockbuster could reinvigorate the chain by adding a new element and giving it some kind of differentiator in the electronics retail sector.
Conversely the move could bring new life to Blockbuster, giving people an additional reason to go into the stores. It could also add something to stave off competition from NetFlix.
That's the bright side. The dark side is that Best Buy is killing Circuit City and NetFlix is killing Blockbuster. When the two doomed business models meet, it may simply result in a larger fireball as they both go down in flames.
A few months ago my wife and I canceled our BlockBuster-mail subscription and watch movies with Time Warner Cable's OnDemand offering instead. I can see why BlockBuster should be concerned.
Oh, the bittersweet bite of regret...
A loyal NetFlix-er, my girlfriend just canceled her subscription when we moved. Why? Because there is a Blockbuster within spitting distance from the new place. Like a gate house to my neighborhood, you literally have to drive right by the place, coming and going. With their new online services, it's basically just like NetFlix, but there's an ACTUAL store. Right there in front of us.
She got a letter from Blockbuster last night, letting her know that her failure to return The Kite Runner in a timely fashion will result in her credit card being charged the full price of the DVD. Isn't this why we switched to NetFlix in the first place???
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