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Wealthifier – Internet, Affiliate, Email and Information Marketing…Teaching You How to Make Money Online » Mumblings » 4 Critical Things Blockbuster vs. Netflix Can Teach Marketers and 3 Things That Can Make Blockbuster Win

4 Critical Things Blockbuster vs. Netflix Can Teach Marketers and 3 Things That Can Make Blockbuster Win

Every now and then, a topic gives me an itch I just need to scratch.  Writing this article serves one of those purposes this week.  Luckily, I can relate it directly to making money online.  Enjoy…

Summarizing the History…

For 2 decades, Blockbuster reigned supreme as the leader of movie rentals.  Cable and satellite had not mastered pay-per-view and on-demand viewing.  They didn’t have the 2 way communication necessary to request a movie and then have it delivered to the viewer.

Blockbuster negotiated fantastic deals with the movie studios that eventually gave them movies in their stores on the same days as the store releases.  Their stores were filled with people.  Their customers grew exponentially by word-of-mouth and their pockets were filling with money.  They were making craaaazy money.

After a while, a new business model started appearing.

This was pushed hard by a new company called Netflix.  They offered to let you choose which movie you wanted on their website and then send it to you in the mail.  At first many people thought that this wouldn’t catch on.  You had to wait for the movie and you missed the experience of touching and reading the movie case.  However, Netflix crushed these concerns by delivering the movies seriously fast to your door and providing great descriptions to the movies on the website.   This was a disruptive business model that eventually threatened the MUCH larger Blockbuster itself.

Fast forward a few small years and we have several other models adding insult to Blockbuster’s injury.

  • Kiosks:  Redbox has little vending machines at the grocery stores with movies for $1.
  • Streaming:  Netflix now streams movies to your TV.  They have gained a direct connection between their internet website and the average living room television through embedded software in set-top boxes like BluRay players and new HD TVs.

The Powerful, Nearly-Unknown Awesomeness of the Blockbuster You Don’t Know About…

Blockbuster has become the old school, legacy way of seeing movies.  It is seen as a dinosaur, nearing extinction.  It has been beaten by crafty, youthful companies like Netflix which provide better value to the customer.  It’s now in bankruptcy proceedings, clinging to life by clutching a snapping branch over a cliff.

The incredibly interesting part is this:  Blockbuster has kept up with all of these young, whippersnappers and absolutely beaten them in most fronts.

Sadly, almost no one knows about it because they are blinded by poor marketing on Blockbuster’s part, and decent marketing on the part of the competitors.  …Not even great marketing on the part of the competitors.

Blockbuster has been tiptoeing in all 4 business models for years:

  • Video stores (Their bread and butter)
  • Rent by Mail (Blockbuster Online – This one is a homerun)
  • Movie Kiosks (Very cool, but hampered a bit by weird interfaces)
  • Movie Streaming (Gets exceptional reviews, although they have kept their price way too high)

Several years ago, I was taken in by one of those web ads giving away “free” laptops if you completed several offers.  Luckily, I found one that was reputable and completed several offers, including a month of Blockbuster Online (the rent-by-mail service).

It was incredible.

  • New releases were available the same day they were at stores, unlike Netflix or other competitors.
  • The price was cheaper than Netflix.
  • BluRay and HDDVD movies were included in your plan for no additional cost.
  • You can exchange your mail movies for movies in-store in case you need to get another movie immediately.  This is a huge advantage that no competitors can offer.
  • The website was very easy to use and had everything in just the right places.
  • The movies came very fast.
  • The envelopes were nicer and easier to open and fill than the Netflix envelopes.  They even had the title of the movie on them, which Netflix still does not offer.
  • The queue was so easy to manage.

It has been improving steadily for years.  I’ve stayed a customer since that first offer.  I’ve also occasionally opened trial memberships of Netflix on the side to compare the two.  Blockbuster-only wins for me hands-down.

  • The Netflix site purposely steers you away from new releases because they don’t get them as early as Blockbuster and can’t compete on that front.
  • Netflix constantly offers me dozens of old 1980’s movies when I just want to see new releases.  I have a lot of favorites from the 80’s, but I’ve seen them all already.  If I want to find one again, I will manually.
  • Netflix is pushing really hard on streaming, even by raising prices on mail rentals and creating a separate plan for streaming only.  They haven’t offered basic things like subtitles and special features.
  • BluRay is a bad word for Netflix apparently since they keep charging more and more for renting HD movies.  The entire world uses HD now, and Netflix is hoping that people will put up with low-res streaming for a few years until there’s enough internet bandwidth on most customers’ internet connections to support streaming HD.  Streaming makes them much more money than mail-order since they don’t need shipping centers.  Putting customer needs at odds with profit choices?  Weak sauce.  Very weak.

So, why is Blockbuster falling apart and not being taken seriously with the mainstream?

1.       Everyone loves an underdog and even though Netflix is HUGE now, everyone still thinks of them as the underdog when compared to the old stogy Blockbuster.

2.       Blockbuster hasn’t distanced the coolness of the new Blockbuster offerings from their dinosaur store model marketing.  They need to re-brand the Blockbuster Online offering in a new and insightful way, showing off the advantages it has over its competitors.  The in-store ads for its other offerings just get lost in the sea of movie posters now.

3.       Blockbuster needs to be completely honest in their marketing, showing off the NEW Blockbuster as the leaner, cooler underdog it now is so that it can reverse its image and gain respect again.

What does this have to do with making money online?


There are several basic lessons from this decades-old case study that can apply to near any business:

1.       The mainstream customer is more and more fickle.  They are also more and more knowledgeable and savvy about what they want.  Stay in tune with your customers and give them what they want. Customers can become raving fans or venomous haters.

2.       Always be humble about your offerings. Nearly everything becomes mainstream and “old hat” eventually.  Ebooks that used to sell for hundreds of dollars five years ago are being given away for free now.  Don’t underestimate your competitors, no matter how small and weird they are.  Your business needs to keep track of trends and ride the waves when it’s advantageous.  Don’t be left out in the cold.

3.       The smallest idea can crush the largest giant. Jack and the Beanstalk is a timeless story for a reason.  Innovation is something that becomes more difficult as your company gets bigger.

4.       Marketing is everything. If you let the public’s image of you fall apart, you have no one to blame except yourself.

BLOCKBUSTER name, design and related marks are trademarks of Blockbuster Inc.  Netflix service and affiliated site are copyrighted by Netflix, Inc.  All rights reserved.

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