

Two weeks ago, Netflix and LG unveiled their recent HD love child – a new TV that can stream HD quality content from Netflix without a set-top box. There will be no need for a bulky box that sits among the orgy of DVRs, DVD players, VHS players (God forbid) and stacks of unorganized DVDs that are waiting to be scratched to the point of being unreadable. There will simply be a TV and an Ethernet jack – simplicity worthy of an Absolut Vodka ad brandishing their token slogan “In an Absolut World.”



It is this sort of ingenuity that has thrust Netflix to the forefront of the DVD rental business. In 12 short years, Netflix has grown its customer base to 8.2M subscribers and leads all online retailers in customer satisfaction. This innovative drive towards excellence begs one question: “Why is Blockbuster failing...miserably?”



Below, is a closer look at Blockbuster’s 5 biggest foul-ups.



Ignorant complacency – Winston Churchill once said “However beautiful the strategy, you should occasionally look at the results.” Blockbuster should have paid attention in history class. While a solid brick and mortar (B&M) strategy carried them through the nineties, it was a strategy that did not leave them flexible to react effectively to changes in the marketplace.

Blatant disregard to Gen-Y – Advancements in content delivery equate to higher efficiencies for consumers. If Echo Boomers are enamored with streamlining their lives, then a business needs to be responsive and work to fulfill those wants/needs in order to be successful. Trying to force-feed Echo Boomers a B&M solution to their media needs just won’t cut it.

Poor customer satisfaction - Blockbuster is to late fees what Bono is to crazy sunglasses. No matter what else the biz/person may do that is positive, all the consumer can focus on is those darn sunglasses.

One foot in – One foot out - Kudos to Blockbuster for FINALLY attempting to take on Netflix a couple years back with their Total-Access program. The only problem is - there’s a greater probability of getting drunk off O’Doul’s than Total-Access actually posing a threat to Netlix. The reasoning: Blockbuster is still trying to dominate the B&M biz while trying to launch a movies-by-mail biz model simultaneously, effectively neglecting both children - someone should contact child welfare services.

Reactive business Environment - It took them 9 years to develop an internet-based DVD subscription service to compete with Netflix! Need I say more?