Blockbuster Video and a Fatal Lesson About Ignoring the Signs

Blockbuster closed almost 1,000 stores last year.

In the past few weeks, I’ve seen something that 15 years ago I would never have dreamed would be a reality: Blockbuster Video stores with “Store Closing” banners hanging out front. What in the world happened? There was a time when Blockbuster was the “king of the world.” They were to small mom and pop video rental stores what Wal-Mart was to small-town grocery and housewares stores. They were a seemingly unshakable, unbeatable behemoth. But they were constantly pissing people off with their late fees policies. One such person was Reed Hastings.  After being charged a late fee, he was inspired to start a rent-by-mail business which quickly turned into a subscription model business. His company, Netflix, launched its site in 1998. The rest, as they say, is history.

What Blockbuster Did Wrong

I’m sure there are business school case studies a-plenty looking at what Blockbuster did wrong. They didn’t take the mounting customer issues with late fees serious enough soon enough. They didn’t innovate soon enough. They didn’t take advantage of the web soon enough. Are you seeing the pattern? Eventually they started to address these issues, but it was too little too late. Netflix was already well on its was as the dominant player in the subscription-based movie rental business. The Netflix brand came to mean speed, simplicity, customer service, and NO LATE FEES. The Blockbuster brand came to mean frustration, poor customer service, and annoying charges for being 20 minutes late. Now, the “Roman Empire” of the video rental world is bankrupt, can’t even pay pay $1.6 million in DVD fees owed, and is on the auction block.

Why Should You Care?

Well, unless you own stock in the company or work at one of its stores, you shouldn’t necessarily care about Blockbuster’s fate. But, if you are a self-employed business (whether you’re a photographer or filmmaker), then there are some lessons here to take note.

Yesterday I wrote about the impending storm in the photography business. The advancement in technology (both the cameras and the web) and the wide availability of cheap education, is changing the landscape. No matter how successful you are now, you cannot afford to rest on your laurels. Nor can you, like Blockbuster, ignore the signs and hope they go away. It’s time to stop complaining about newbies in the market, clients not valuing your work, or “rock stars” killing the art, and start looking for…

Ways to Weather the Storm

  • Be Different: it’s no longer good enough to be technically proficient. You have to be decidedly different. I see a lot of photographers talk about the need for “learning the craft.” Here, here. I totally agree. But I think we need to hear more about “finding your unique voice.” Seeking your style. Creating work that is truly something that stands apart from the pack. You can put five technically proficient visual artists in a room together, but if nothing about their work sets themselves apart, they risk just being commodities.
  • Diversification: it will become increasingly necessary to find other sources of revenue related to your craft. As a filmmaker, that might mean creating films (narrative, documentary, or training) that clients are willing to buy. As a photographer that might mean stock photography, greeting cards, calendars, and other similar products. Or, it may mean adding related services (photographer adding video production, and vice versa). I often see high profile photographers take flack for starting tangential companies (e.g. bags, websites, iPhone Apps, DVDs, etc.) as if they’re “selling out” or something. It’s not about selling out, it’s about surviving the long haul.
  • Digital Distribution: some how, some way, many of you will have to figure out a way to give your clients digital images and get most of your money up front. We’re already seeing this trend among vets like Bambi Cantrell (who talked about it on her CreativeLive course last week) and Antisdels Photography (who talked at the Senior Portraits Artist Event this year about their digital negatives product). Particularly in the senior market where kids will do almost anything to get the photos they want for their Facebook profile. (We’ve had kids grab images from our blog, download watermarked images from our online lab, and take iPhone photos of their printed mount. We even had one girl take a screen shot of her picture from an Animoto video on our Facebook page. You gotta give them credit for persistence and ingenuity.)

Blockbuster’s Not Alone

Blockbuster is not the only lesson here. I can name a few others. Tower Records. Borders Books. CompUSA. Yahoo. Yes, and even Microsoft. Obviously, some of these companies haven’t failed, but their hegemony has significantly declined. And in all cases by “newbies” who took advantage of technology and made bold moves. But even some of these “newbies” are being threatened by newer “newbies.” For every Netflix there’s a Hulu and Redbox. For every MySpace there’s a Facebook (and now Facebook needs to be wary of Twitter).

Succeed in the Business So You Can Continue the Art

Last week in reply to my “Art and Business of Photography” post, one photog tweeted “Leave it to @rondawson to say ‘It’s just business.’ “ I can understand her frustration. I really can. I too am an artist and care dearly for my art. It is BECAUSE I care for my art that I want my business to prosper. I want to prosper and grow so that I have the freedom to do the projects I want to do, many of which are for companies that can’t afford my regular fees. I want to be able to do more personal projects like my Mixed in America documentary series. But that means accepting the truth of what it takes to succeed in today’s competitive, digital dominated industry, and making the sometimes hard choices to survive and thrive.

So, the question at hand is: will you be the Netflix or the Blockbuster of your little part of the world? What are you doing to weather the storm?

11 thoughts on “Blockbuster Video and a Fatal Lesson About Ignoring the Signs

  1. Music stores had their death 7 years ago. But I thinks it’s Funny or just Evil, that Netflix has a banner on this page. RIP Blockbuster. My kids will never have the memories of driving to the video store. Walking in and smelling fresh popcorn with a life size poster of Freddy and the endless possibilities of movies. Too bad. But everything has a comeback. 10 years from now, video stores will be back.

    1. Hey Aldo, the Netflix ad you see is auto-generated. sites will sometimes place ads at the end of posts for readers not signed into their own account. It’s how they are able to keep it free. No doubt there was a Netflix ad because that was the subject of this post and one of the tags. Same technology Google and Facebook uses.

      I seriously doubt you’ll see any kind of video store ten years from now, not a rental one anyway.

  2. Darn those customers for “always being right.” Aldo’s comment definitely sparked up the nostalgia about riding my bike to Video Joy, after getting some snacks from the Liquor Store, and looking for VHS tapes and Nintendo games to rent and being able to put it on my dad’s tab. It was just so hard for little Video Joy to keep up with Blockbuster springing up a few miles away- I’m sure the “Joy” is coming back to that owner— if he’s still alive.

  3. Good post Ron. I really like the point made under Diversification. That is good perspective. I find myself stressing over what to focus on since I am working to build my business to go from a “side job” to full time so I can escape my cubical. My main business is music, event and corporate filmmaking and that is reflected on my website. I also do eLearning development, voice-overs, screencasting, and WordPress site development so if I am not careful I could easily get tangled up in multiple projects. I need to protect my time so that I can continue to deliver on my promises and provide top-notch customer service.

    The other side of the diversification coin was covered nicely in your book Ron (Refocus), do you have ONE business that is a one-stop shop for all your services OR do you have a separate brand identity for each (eg. ABC-weddings, ABC-music, ABC-corporate, etc). This is always a bit of a struggle for me… am I confusing people with my services? I know when my income will support branching out with more websites, identities, etc I will make that move.

    Thanks Ron!

  4. Ron, I enjoyed your post tremendously. Hopefully I’ll be able to take something positive away from it and use it in my business.

  5. Nice points Ron, on both of your latest posts. I think it’s obvious that as technology becomes more and more ubiquitous, it is our creativity and our relationships with clients (and to some extent other vendors too) that will bring success. They way we treat people (including our public online interactions) matter – probably more now than any technology or any amazing photo or video content.

    1. Congrats Bill on being the first person to mention vendor relationships. I agree. A very important relationship to cultivate.

      Thanks for reading.

  6. Ron I think a great rule to live by is “Don’t settle for success”. Great post

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