It’s been insightful to follow the trials and tribulations of Blockbuster (or Blockbuster Video as I still think of it in my mind). Their troubles offer a cautionary tale to all franchisors who are riding the crest of a wave at the moment, but also offer a glimmer of hope to people who have stuck out difficult times with a business.
Blockbuster’s rise to national prominence was perfectly in line with many other franchise successes. With the rise of the home video and the VCR, Blockbuster provided a popular and affordable model for video rentals and, then, DVDs. Every town in America seemed to have a Blockbuster on or around Main Street in the '90s.
And now? Blockbuster is struggling to survive, the last of the video giants. Blockbuster’s problems are caused by a failure to adapt to a changing market or the complete elimination of its market, depending on who you ask. Whatever your position on illegal downloading is, it’s undeniable true that alternative film-watching mediums like Redbox, NetFlix or iTunes have come around to provide a way to watch movies that is far more convenient than the Blockbuster model. The depressing thing for Blockbuster franchisees is that people are watching more films than ever before. They’re just choosing not to head to as Blockbuster as frequently.
Where does Blockbuster go from here? As the Wall Street Journal recently reported, it’s doing everything it can to avoid bankruptcy. The business has a dogged desire to survive. It is tapping into another proven franchise operation: vending, with plans to roll out 10,000 DVD kiosks by 2011. From the soundings of its corporate executives, the word of the business is “transformation”.
Still, its mail order and digital streaming operations are dwarfed by their competitors. The numbers, as the WSJ laid out and were confirmed by the official figures that came out last week. In the franchising community, we value our successes but we should also learn from the failures. Blockbuster once ruled an empire that was once as much a part of America as McDonald’s. But the business changed, away from the store, towards the internet and the home. Businesses must be free to change, revise, reimagine themselves. If Blockbuster does survive, it will be a credit to its franchisees who have stuck with it, despite the industry's problems.