According to a new report, Blockbuster (the former iconic movie rental store) has decided to put itself up for sale. Last year, Blockbuster filed for chapter 11 bankruptcy in an effort to restructure debt. This year, however, sales have been low leading to an effort to raise more money. All in all, Blockbuster is no longer a giant in the movie rental business. In fact, the leading contendor to win Blockbuster is Monarch Alternative Capital who gave Blockbuster $125M for the 2010 turnaround (which obviously didn't help).
So, what happened to Blockbuster? Well, you really only need two words to answer this question; Redbox and Netflix. I wouldn't say these companies originally stole the movie rental business, they were just smarter at the game. Both realized that individuals don't want to rent a movie for 4 days at a time with a charge price of $5. They've targeted what the customers want. Focusing on minimal rental time at lower cost. Not to mention, allowing movie lovers to stream live movies to there homes for a monthly charge.
Redbox and Netfilx took a very similar strategic approach as Cirque du soleil, who tweaked the rules of the circus industry. Cirque du soleil knew that by focusing on certain areas, they could take over the traditional circus. These areas included no animals (which decreased expenses), yearly production (increased revenues), story or theme (which intrigued customers) and many more. In the end, Cirque du soleil just built upon the small principles that the traditional circuses created and made it into a better show that was targeted toward the customer.
Blockbuster, like the traditional circus, didn't follow the paradigm shift. By not strategically advancing, both companies/shows we're left in the dust by other smarter, well designed businesses. If Blockbuster would have simply focused there attention on the new advances in the industry, they wouldn't be looking for buyer today.
http://www.afterdawn.com/news/article.cfm/2011/02/11/blockbuster_in_talks_to_sell_itself
