The decade that was and still is; Facebook, MySpace, You Tube and Internet DVD Rental. So who forgot to tell Blockbuster? Or did Blockbuster honestly think that they could take on its biggest competition....the internet? From 2001 to 2002 Blockbuster was the leader in the video rental business. Trading at almost $30 a share, its market-cap was at around $5.75 billion.
Yet the once dominant DVD rental service has been steadily losing money, while seeing its market share eroded by a number of online rental start-ups.
Did Blockbuster fail to see a growing number of internet DVD rentals or did they honestly think that they were immortal? The share price went into freefall in 2009 losing 77% in a single day, (and has been an indifferent performer ever since), and only then did Blockbuster see fit to ramp up its rental business online, but as it seems it was too little too late.
Netflix, an online internet DVD Rental Company saw a niche. Starting in 1999 Netflix has over 20 million subscribers just 10 years later. With profits for the last three quarters, it shows where our future is heading and what consumers want.
For the cost of one new release DVD at Blockbuster, you can instantly download any of the latest movies and with 77.3% of Americans having access to the internet at home; it proves why Netflix is becoming more and more popular. So why did Blockbuster not see this growing trend earlier? With the closure of many of the stores in its expansive network it would appear that the once strong enterprise has lost its viability. There are times and seasons for everyone and everything, and it seems Blockbuster may have had their day.
Carlene Stewart is a former Vocational Educator, with significant management experience in the retail and beauty industries