blockbuster-closingIts name starts with a “B”, and new methods of media distribution drove it into bankruptcy.

No, not that one. The other one. Blockbuster, which filed for bankruptcy back in September, is now putting itself up for sale to try to “accelerate our Chapter 11 proceedings and move the company forward.” It claims to have a $290 million offer by a group of its debt holders, but wants to see if anyone else might be interested.

blockbuster-p2pIt’s interesting to compare the cases of Borders and Blockbuster. As I mentioned above, both of them were driven to bankruptcy in large part by new media distribution methods. With Blockbuster, it was Netflix (first by mail, then streaming), with latecomer Redbox just the icing on the cake. (And, of course, peer-to-peer movie downloads.) With Borders it was on-line megastores like Amazon, and later e-books. And both of them missed early chances to get in on those new methods: Blockbuster scoffed at an early offer by Netflix to go into partnership, and Borders surrendered its online sales to Amazon.

In this Techdirt piece which I’ve mentioned before, Mike Masnick talks about how many industries and businesses don’t pay attention to new business models until it’s almost too late for them. by which time it’s extremely challenging to survive while playing catchup—while the smarter ones look years ahead. Companies misjudge the speed of trends, it’s hard to understand new models and technology unless you’re on the inside, and it’s difficult to build up businesses that cannibalize your existing models.

As rapidly as digital change is coming, I wonder how many more old-school businesses will fall to new models? I don’t expect Borders and Blockbuster to be the last.

1 COMMENT

  1. “With Borders it was on-line megastores like Amazon, and later e-books.”

    Yes. And the internet, of course, which pretty much crashed the magazine market.

    Not to mention that a not too insignificant portion of Border’s revenue came from selling music and movies, CDs and DVDs. And all we know how THAT turned out.

    Ebooks aren’t helping. But physical media sales have been on the decline for years…

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