hello everybody Tom Ellsworth here and
welcome to case studies with the biz doc
this is where we study what happened to
other companies to find important
lessons out of a case study that you can
apply to your business today or the one
you’re gonna build tomorrow this week
we’re gonna talk about blockbuster
remember a blockbuster big video rental
chain well
blockbuster didn’t have a very good
sequel when it was time for the digital
era and they flopped and we’re gonna
find out why and how you can avoid it
before we do that and talk about all the
badness and what happened let’s go back
and talk about what was really a pretty
good opening and a pretty good launch
for blockbuster they were actually
founded in 1985 in Dallas Texas by a guy
that had experience with databases and
he did a really good job of designing
some early analysis tools where they
would determine what videos that they
were gonna put in what location based on
the neighborhood and what people liked
it was pretty sharp thinking way back
then and before long they were up and
running and really getting off the
ground along the way they offered
franchise opportunities so you could get
yourself a piece of this action and get
in on this blockbuster deal renting big
video tapes to all Americans they could
go home and watch a popular movie with
their family well it attracted the
attention of a guy named wayne Huizenga
now wayne Huizenga was a high-flying guy
with a company called waste management
and he thought it was so cool to have a
franchise a blockbuster that he bought
the whole company and he paid eighteen
point five million dollars for it can
you believe that after two years
eighteen point five million dollars you
know we did a previous case study on a
company called Groupon where after two
years Google offered six billion dollars
and he didn’t take it if you want to
know that story go watch the Groupon
case study but back at Blockbuster after
two years wayne Huizenga of waste
management buys them for eighteen point
five million dollars and then wayne he
was a pretty good executive and he and
his partner started putting things to
work and before long they had
twenty-eight hundred stores now I say
before long because it took him about
five years but they just put these
management principles they acquired some
companies and they were just a freight
train all of a sudden they were twenty
eight hundred stores so popular that
Viacom the big media company paid eight
point four billion for Blockbuster in
1994 that’s a pretty good payday for
wayne Huizenga and his buddies and their
plan it was interesting Blockbuster had
1.25 billion dollars in the bank cash in
the bank and they were bought and what’s
called a stock swap where Viacom gave
them stock in Viacom worth this eight
point four billion dollars and they
bought the company blockbuster complete
with its bank account with all that
money in it and you know what they were
gonna do they were gonna use some of
that money to actually go by Paramount
Studios well if that sounds like
creative and confusing deal-making will
soon find out that it was but the bottom
line is you probably shouldn’t have the
finance guys making acquisitions this
should be strategy and I think when
you’re thinking that your I’ll just buy
this company it’ll stay profitable
there’s an assumption and I’ll take this
billion dollars inside it and I’m just
gonna go buy this other company over
here this movie studio there’s another
assumption well maybe someday I’ll do a
case study on Viacom the meanwhile now
blockbuster is part of Viacom and wayne
Huizenga and his guys have been paid
handsomely well that was in 1994 and
three years later in Silicon Valley
California
a guy named Reed Hastings was really
pissed off because Blockbuster charged
him $40 because he was late returning
Apollo 13 well he got really annoyed
with that and he started thinking it
over and saying isn’t there a better way
to do this isn’t there’s something that
could be done and he just started
thinking about it and strategically he
came up of it and he created a company
called Netflix so Netflix starts with
good strategic thinking and a lot of
things there but also a little bit of
the spark there was somebody returning
in a
Paulo at 13 and getting charged 40 bucks
and late fees so Netflix it was very
interesting they took advantage of the
fact that videotape weighed this much
but a DVD was really light you could put
a DVD in a simple little envelope and
you remember those Netflix was red and
white envelopes made of that special
material that would protect the DVD they
just mailed it to you it was about as a
little bit just a tiny bit heavier than
a letter you would get but it was a DVD
and you would watch it the other thing
they did is they invested in technology
and they started saying you know if we
mail them to people they’re not going to
like the store to browse and we could
have a selection on the website but what
if we start paying attention to what
they’re renting and what they like and
then we say maybe we’ll let them rent
something that they think is interesting
based on what they’ve already rented and
better yet instead of charging them per
DVD rental which wasn’t really popular
at Blockbuster and had its issues with
late fees and Netflix found some issues
there too so Netflix said the hell with
it why don’t we make a subscription and
you could rent up to this many DVDs a
month and then we could always send you
some that maybe we think that you would
find interesting or we’ll put it on like
a list and tell you hey we think you’ll
like this and we’ll put this on the list
so it will come up and say you seem to
like action-adventure movies maybe you’d
like this one to help people discover
movies that they hadn’t thought about
well guess what Netflix took off we all
know it took off and there they’re off
and running
meanwhile Viacom is saying well you know
let’s make some money off this
blockbuster thing let’s do something
about it and in 1999 they sent
blockbuster public had an IPO initial
public offering which is the initials
for what happens when you go on the
stock market for the first time and
Viacom sent blockbuster out and they’re
on the stock market and as you can see
it was kind of a rocky ride initially
and then in 2002 you see right here
there’s another IPO that one belonged to
Netflix
so now blockbuster is on the stock
market
and their value when they were out there
on that stock market 2.6 billion dollars
wait a minute didn’t I say that Viacom
paid eight point four billion for them
hmm
could it be that’s things were starting
to happen well there were you know it
was very interesting in the year 2000
shortly after the IPO Blockbuster
announced that they had for the year you
know their revenues and they were
talking about revenue and talking about
how many videos people would rent and
they slipped in this little fact that
they made 800 million dollars on late
fees eight hundred million dollars on
late fees you know there’s a word for
that
damn you know good grief
so you you’re making money on videos but
you’re making money on late fees to me
that means that there’s 800 million
dollars worth of annoyed consumers that
may be returned it a day later or a week
late okay if you’re like my brother and
your turn at a week late you should pay
a late fee but if I’m just that day late
give me a break do you want me to rent
from you tomorrow or do you want to just
find ways so I just dig it me
well needless to say there was a lot of
people that looked at that and said you
know gosh you know that seems like a lot
of money on late fees our American
consumers that are responsible or you
that greedy
well greedy or not anyway blockbuster
was still moving along and in 2004
blockbuster would be at its peak with
9,000 stores globally 9,000 stores well
the internet happened in 1996 a little
bit before that obviously but 1996 the
netscape browser gave birth to the
internet and this is eight years later
and the Internet’s doing a lot of things
and blockbuster with a competitor out
there in Netflix is still leasing new
locations renting new locations buying
new locations and they had 9,000 stores
globally which means they had 9,000
payments on real estate 9,000 leases or
things in 9,000 locations that needed
employees you’re probably smelling what
I’m tasting when I say
that is that hmm really was that really
the business to be in with all those
people and all those locations and all
that stuff well at that time they were
worth nearly 5 billion dollars and that
would be the peak for blockbuster
because Netflix and its mail-out service
and its subscription service and its
really amazing I remember I don’t know
if you remember a recommendation that
would introduce you to movies that you
might like based on other movies you
watched it was working pretty good and
after their IPO to see which way they
were going and so here we have 2004
Netflix is doing well Americans are
loving it blockbuster starting to shift
and the entire history and future a
blockbuster can get summed up in one two
year period Oh for 206 and I call this
the showdown at the OK Corral now never
mind what that is that’s the name of an
old movie but it was when these two gun
fighters met and emphasis was you
against me and only one of us is coming
Blockbuster announced a mailing service
to mail out DVDs in the mail out rentals
to America and then initially the stock
market thought oh no poor Netflix cuz
big giant blockbuster has now got this
service and it went down but you know
what nimble quick new blockbuster you
know you know with a mailing service no
that’s not what it was it was old slow
blockbuster trying to do a mailing
service and soon we would find out that
the financial results weren’t there and
they weren’t doing so well and Netflix
recovered and kept pumping along and
what you had here was blockbuster
trapped with all those locations and all
that real estate and they had this
legacy mindset that they would just add
things on to it they had a new CEO in
there somewhere who had actually come
from 7-eleven and do you remember when
blockbusters basically became
convenience stores and coke and candy
and all this stuff and you could rent
video games while running a video games
smart that’s similar to running a movie
but all that other crap in there it’s
come on it’s like who were you i
remember going into blockbuster and
being just amazed at the amount of extra
stuff that was there beyond movies so
needless to say they’re starting to have
issues they’re starting to have troubles
and guess what at the end of those two
years we see where this went netflix
recovered and blockbuster heads to the
place where bad sequels go to die sort
of like Dumb and Dumber – right it
wasn’t even nearly as good as the first
movie the first movie was a blockbuster
it was a blockbuster for wayne Huizenga
and bringing the way to get movies to
you and me but when the internet came
along and digital technologies came
along and they charged 40 bucks to a guy
named Reed Hastings we got pissed off
about paying that fee for returning
Apollo 13 guess what things change and
blockbuster had all that money in the
bank all that resource heck they were
owned by Viacom a giant media company
they’re on a movie studio and yet they
fumbled the opportunity because legacy
thinking at one point they had
executives that had come over from
Walmart at one part they had executives
come over from 7-eleven that doesn’t
sound like forward-thinking to me even
if those executives were really good
smart people that just doesn’t seem like
forward-thinking so here he had it a bad
ending and a sad thing and I’ll tell you
a little Side Story in 2006 and 7 right
here I was working at a company called
go TV and we were one of the first
companies that had put video on cell
phones and what had happened is I had
seen how we were using our technology
and I thought what isn’t it somebody see
about maybe putting eventually movies on
cell phones and I if you read my bio and
you know I came from Sprint and I built
some of the most innovative rate plans
on the planet that changed an industry
helped change the industry with all the
good people at Sprint that were around
me well I looked at it and I said you
know I think there’s something here so I
had called Blockbuster and I said listen
I’ve got technology and I’ve got the
ability to do this
you’ve got all these relationships with
the studios let’s put this together and
there was a CEO at the time his name was
James Keyes he had just come to
Blockbuster after the previous CEO was
let go for reasons that are pretty
obvious on the blue line and i sat with
her people and i said look you know
let’s do this I’ve got the technology
you’ve got all these licenses and all
this content let’s go ahead and do that
and they sat there telling me that the
wireless carriers won’t do it they won’t
do this they won’t do that you don’t
understand they won’t let people pay
that much for data people get mad that
the data cost so much and I looked
across the table I’m not like wait a
minute who do you think you’re talking
to right maybe I should leave the room
and you should go check up on my
LinkedIn and then I’ll come back because
as you will see I built rate plans in
this industry I built rate plans and I’m
working for a company right now that’s
building to video technology for the
future
you know what that told me that told me
even though they had keys that new CEO
that they were dead right you know what
blockbuster is all about movies and it
reminds me of a movie remember in the
matrix remember in the matrix your men
are already dead and they were dead they
declared bankruptcy in 2010 dead and it
didn’t have to be that way because let’s
look at what they had number one they
were owned by Viacom they had access to
content they were connected to a media
company number two they had money at one
point they had 1.2 billion dollars in
the bank that Viacom actually the reason
they bottom was to get at that money
they were public on the stock market
they were doing ok they could see the
future they saw a competitor emerge they
just didn’t react fast enough and their
legacy thinking was tied to their legacy
business model and somebody was probably
thinking you know how are you going to
get rid of all these locations how are
we going to sell all this real estate
well you know what that should have been
a problem that you put innovation in
force and find somebody that can buy
your real estate and figure it out
because you’re gonna die if you stayed
there they just didn’t do it they had
everything they needed including being
able to watch Netflix start and say Wow
me
be something’s going on here and by the
time they decide they’re gonna go out
and compete with Netflix Netflix was
founded in 1997 they gave Netflix a
seven year head start before they
introduced a mail-out system in 2004 you
know a funny Side Story that’s not so
funny if you’re looking at this side of
the blue line is that in the early 2000
Netflix had actually gone to Blockbuster
and said hey you got all these
relationships you got all these movies
why don’t we offer a mail service to be
an additional way people could rent
movies they could return them at the
Blockbuster store but they could you
know get them by mail whenever they want
and says we could do that and actually
the if depending on who you listen to
the myth versus reality is they were
laughed out of the office or a
blockbuster just said it they didn’t
think it was a very good idea but the
fact is the Fox was in the hen house
talking to him about a partnership that
never happened and then some years later
you know the rest is history and I think
that’s an interesting note that also
helps you understand just how
blockbuster didn’t understand what was
going on and how they missed cues in the
market including one that was sitting in
their conference room offering to
partner with them to offer a mail
service to go right next to physical
video rental Blockbuster didn’t run to a
digital future and as a matter of fact
they had everything they needed to
succeed instead they slid to a future
death because of their past decisions
that’s it so when you look at it the
thing for yourself to remember is don’t
let a decision you make over here become
your permanently entrenched thinking
think of it as just a decision you made
at a point in time and any decision you
make big or small I may have to undo
this decision some day and just teach
your mind to be flexible blockbuster had
it happened many companies had it happen
I’m gonna be flexible I’m gonna be
malleable and I’m gonna be ready for the
future if I have to change something I’m
never gonna say I can’t I’m a video
renter with stores and that’s what I’ll
always be nope I’m a person with a
relationship with Americans that want to
love movies can you think if those two
attitudes were different
there you have it well anyway that’s the
blockbuster case study for this week and
of course as usual please subscribe to
value tainment
the best channel on the internet for
content for entrepreneurs
until next time with another case study
I’m Tom Ellsworth and I hope I left you better than I found you
welcome to case studies with the biz doc
this is where we study what happened to
other companies to find important
lessons out of a case study that you can
apply to your business today or the one
you’re gonna build tomorrow this week
we’re gonna talk about blockbuster
remember a blockbuster big video rental
chain well
blockbuster didn’t have a very good
sequel when it was time for the digital
era and they flopped and we’re gonna
find out why and how you can avoid it
before we do that and talk about all the
badness and what happened let’s go back
and talk about what was really a pretty
good opening and a pretty good launch
for blockbuster they were actually
founded in 1985 in Dallas Texas by a guy
that had experience with databases and
he did a really good job of designing
some early analysis tools where they
would determine what videos that they
were gonna put in what location based on
the neighborhood and what people liked
it was pretty sharp thinking way back
then and before long they were up and
running and really getting off the
ground along the way they offered
franchise opportunities so you could get
yourself a piece of this action and get
in on this blockbuster deal renting big
video tapes to all Americans they could
go home and watch a popular movie with
their family well it attracted the
attention of a guy named wayne Huizenga
now wayne Huizenga was a high-flying guy
with a company called waste management
and he thought it was so cool to have a
franchise a blockbuster that he bought
the whole company and he paid eighteen
point five million dollars for it can
you believe that after two years
eighteen point five million dollars you
know we did a previous case study on a
company called Groupon where after two
years Google offered six billion dollars
and he didn’t take it if you want to
know that story go watch the Groupon
case study but back at Blockbuster after
two years wayne Huizenga of waste
management buys them for eighteen point
five million dollars and then wayne he
was a pretty good executive and he and
his partner started putting things to
work and before long they had
twenty-eight hundred stores now I say
before long because it took him about
five years but they just put these
management principles they acquired some
companies and they were just a freight
train all of a sudden they were twenty
eight hundred stores so popular that
Viacom the big media company paid eight
point four billion for Blockbuster in
1994 that’s a pretty good payday for
wayne Huizenga and his buddies and their
plan it was interesting Blockbuster had
1.25 billion dollars in the bank cash in
the bank and they were bought and what’s
called a stock swap where Viacom gave
them stock in Viacom worth this eight
point four billion dollars and they
bought the company blockbuster complete
with its bank account with all that
money in it and you know what they were
gonna do they were gonna use some of
that money to actually go by Paramount
Studios well if that sounds like
creative and confusing deal-making will
soon find out that it was but the bottom
line is you probably shouldn’t have the
finance guys making acquisitions this
should be strategy and I think when
you’re thinking that your I’ll just buy
this company it’ll stay profitable
there’s an assumption and I’ll take this
billion dollars inside it and I’m just
gonna go buy this other company over
here this movie studio there’s another
assumption well maybe someday I’ll do a
case study on Viacom the meanwhile now
blockbuster is part of Viacom and wayne
Huizenga and his guys have been paid
handsomely well that was in 1994 and
three years later in Silicon Valley
California
a guy named Reed Hastings was really
pissed off because Blockbuster charged
him $40 because he was late returning
Apollo 13 well he got really annoyed
with that and he started thinking it
over and saying isn’t there a better way
to do this isn’t there’s something that
could be done and he just started
thinking about it and strategically he
came up of it and he created a company
called Netflix so Netflix starts with
good strategic thinking and a lot of
things there but also a little bit of
the spark there was somebody returning
in a
Paulo at 13 and getting charged 40 bucks
and late fees so Netflix it was very
interesting they took advantage of the
fact that videotape weighed this much
but a DVD was really light you could put
a DVD in a simple little envelope and
you remember those Netflix was red and
white envelopes made of that special
material that would protect the DVD they
just mailed it to you it was about as a
little bit just a tiny bit heavier than
a letter you would get but it was a DVD
and you would watch it the other thing
they did is they invested in technology
and they started saying you know if we
mail them to people they’re not going to
like the store to browse and we could
have a selection on the website but what
if we start paying attention to what
they’re renting and what they like and
then we say maybe we’ll let them rent
something that they think is interesting
based on what they’ve already rented and
better yet instead of charging them per
DVD rental which wasn’t really popular
at Blockbuster and had its issues with
late fees and Netflix found some issues
there too so Netflix said the hell with
it why don’t we make a subscription and
you could rent up to this many DVDs a
month and then we could always send you
some that maybe we think that you would
find interesting or we’ll put it on like
a list and tell you hey we think you’ll
like this and we’ll put this on the list
so it will come up and say you seem to
like action-adventure movies maybe you’d
like this one to help people discover
movies that they hadn’t thought about
well guess what Netflix took off we all
know it took off and there they’re off
and running
meanwhile Viacom is saying well you know
let’s make some money off this
blockbuster thing let’s do something
about it and in 1999 they sent
blockbuster public had an IPO initial
public offering which is the initials
for what happens when you go on the
stock market for the first time and
Viacom sent blockbuster out and they’re
on the stock market and as you can see
it was kind of a rocky ride initially
and then in 2002 you see right here
there’s another IPO that one belonged to
Netflix
so now blockbuster is on the stock
market
and their value when they were out there
on that stock market 2.6 billion dollars
wait a minute didn’t I say that Viacom
paid eight point four billion for them
hmm
could it be that’s things were starting
to happen well there were you know it
was very interesting in the year 2000
shortly after the IPO Blockbuster
announced that they had for the year you
know their revenues and they were
talking about revenue and talking about
how many videos people would rent and
they slipped in this little fact that
they made 800 million dollars on late
fees eight hundred million dollars on
late fees you know there’s a word for
that
damn you know good grief
so you you’re making money on videos but
you’re making money on late fees to me
that means that there’s 800 million
dollars worth of annoyed consumers that
may be returned it a day later or a week
late okay if you’re like my brother and
your turn at a week late you should pay
a late fee but if I’m just that day late
give me a break do you want me to rent
from you tomorrow or do you want to just
find ways so I just dig it me
well needless to say there was a lot of
people that looked at that and said you
know gosh you know that seems like a lot
of money on late fees our American
consumers that are responsible or you
that greedy
well greedy or not anyway blockbuster
was still moving along and in 2004
blockbuster would be at its peak with
9,000 stores globally 9,000 stores well
the internet happened in 1996 a little
bit before that obviously but 1996 the
netscape browser gave birth to the
internet and this is eight years later
and the Internet’s doing a lot of things
and blockbuster with a competitor out
there in Netflix is still leasing new
locations renting new locations buying
new locations and they had 9,000 stores
globally which means they had 9,000
payments on real estate 9,000 leases or
things in 9,000 locations that needed
employees you’re probably smelling what
I’m tasting when I say
that is that hmm really was that really
the business to be in with all those
people and all those locations and all
that stuff well at that time they were
worth nearly 5 billion dollars and that
would be the peak for blockbuster
because Netflix and its mail-out service
and its subscription service and its
really amazing I remember I don’t know
if you remember a recommendation that
would introduce you to movies that you
might like based on other movies you
watched it was working pretty good and
after their IPO to see which way they
were going and so here we have 2004
Netflix is doing well Americans are
loving it blockbuster starting to shift
and the entire history and future a
blockbuster can get summed up in one two
year period Oh for 206 and I call this
the showdown at the OK Corral now never
mind what that is that’s the name of an
old movie but it was when these two gun
fighters met and emphasis was you
against me and only one of us is coming
Blockbuster announced a mailing service
to mail out DVDs in the mail out rentals
to America and then initially the stock
market thought oh no poor Netflix cuz
big giant blockbuster has now got this
service and it went down but you know
what nimble quick new blockbuster you
know you know with a mailing service no
that’s not what it was it was old slow
blockbuster trying to do a mailing
service and soon we would find out that
the financial results weren’t there and
they weren’t doing so well and Netflix
recovered and kept pumping along and
what you had here was blockbuster
trapped with all those locations and all
that real estate and they had this
legacy mindset that they would just add
things on to it they had a new CEO in
there somewhere who had actually come
from 7-eleven and do you remember when
blockbusters basically became
convenience stores and coke and candy
and all this stuff and you could rent
video games while running a video games
smart that’s similar to running a movie
but all that other crap in there it’s
come on it’s like who were you i
remember going into blockbuster and
being just amazed at the amount of extra
stuff that was there beyond movies so
needless to say they’re starting to have
issues they’re starting to have troubles
and guess what at the end of those two
years we see where this went netflix
recovered and blockbuster heads to the
place where bad sequels go to die sort
of like Dumb and Dumber – right it
wasn’t even nearly as good as the first
movie the first movie was a blockbuster
it was a blockbuster for wayne Huizenga
and bringing the way to get movies to
you and me but when the internet came
along and digital technologies came
along and they charged 40 bucks to a guy
named Reed Hastings we got pissed off
about paying that fee for returning
Apollo 13 guess what things change and
blockbuster had all that money in the
bank all that resource heck they were
owned by Viacom a giant media company
they’re on a movie studio and yet they
fumbled the opportunity because legacy
thinking at one point they had
executives that had come over from
Walmart at one part they had executives
come over from 7-eleven that doesn’t
sound like forward-thinking to me even
if those executives were really good
smart people that just doesn’t seem like
forward-thinking so here he had it a bad
ending and a sad thing and I’ll tell you
a little Side Story in 2006 and 7 right
here I was working at a company called
go TV and we were one of the first
companies that had put video on cell
phones and what had happened is I had
seen how we were using our technology
and I thought what isn’t it somebody see
about maybe putting eventually movies on
cell phones and I if you read my bio and
you know I came from Sprint and I built
some of the most innovative rate plans
on the planet that changed an industry
helped change the industry with all the
good people at Sprint that were around
me well I looked at it and I said you
know I think there’s something here so I
had called Blockbuster and I said listen
I’ve got technology and I’ve got the
ability to do this
you’ve got all these relationships with
the studios let’s put this together and
there was a CEO at the time his name was
James Keyes he had just come to
Blockbuster after the previous CEO was
let go for reasons that are pretty
obvious on the blue line and i sat with
her people and i said look you know
let’s do this I’ve got the technology
you’ve got all these licenses and all
this content let’s go ahead and do that
and they sat there telling me that the
wireless carriers won’t do it they won’t
do this they won’t do that you don’t
understand they won’t let people pay
that much for data people get mad that
the data cost so much and I looked
across the table I’m not like wait a
minute who do you think you’re talking
to right maybe I should leave the room
and you should go check up on my
LinkedIn and then I’ll come back because
as you will see I built rate plans in
this industry I built rate plans and I’m
working for a company right now that’s
building to video technology for the
future
you know what that told me that told me
even though they had keys that new CEO
that they were dead right you know what
blockbuster is all about movies and it
reminds me of a movie remember in the
matrix remember in the matrix your men
are already dead and they were dead they
declared bankruptcy in 2010 dead and it
didn’t have to be that way because let’s
look at what they had number one they
were owned by Viacom they had access to
content they were connected to a media
company number two they had money at one
point they had 1.2 billion dollars in
the bank that Viacom actually the reason
they bottom was to get at that money
they were public on the stock market
they were doing ok they could see the
future they saw a competitor emerge they
just didn’t react fast enough and their
legacy thinking was tied to their legacy
business model and somebody was probably
thinking you know how are you going to
get rid of all these locations how are
we going to sell all this real estate
well you know what that should have been
a problem that you put innovation in
force and find somebody that can buy
your real estate and figure it out
because you’re gonna die if you stayed
there they just didn’t do it they had
everything they needed including being
able to watch Netflix start and say Wow
me
be something’s going on here and by the
time they decide they’re gonna go out
and compete with Netflix Netflix was
founded in 1997 they gave Netflix a
seven year head start before they
introduced a mail-out system in 2004 you
know a funny Side Story that’s not so
funny if you’re looking at this side of
the blue line is that in the early 2000
Netflix had actually gone to Blockbuster
and said hey you got all these
relationships you got all these movies
why don’t we offer a mail service to be
an additional way people could rent
movies they could return them at the
Blockbuster store but they could you
know get them by mail whenever they want
and says we could do that and actually
the if depending on who you listen to
the myth versus reality is they were
laughed out of the office or a
blockbuster just said it they didn’t
think it was a very good idea but the
fact is the Fox was in the hen house
talking to him about a partnership that
never happened and then some years later
you know the rest is history and I think
that’s an interesting note that also
helps you understand just how
blockbuster didn’t understand what was
going on and how they missed cues in the
market including one that was sitting in
their conference room offering to
partner with them to offer a mail
service to go right next to physical
video rental Blockbuster didn’t run to a
digital future and as a matter of fact
they had everything they needed to
succeed instead they slid to a future
death because of their past decisions
that’s it so when you look at it the
thing for yourself to remember is don’t
let a decision you make over here become
your permanently entrenched thinking
think of it as just a decision you made
at a point in time and any decision you
make big or small I may have to undo
this decision some day and just teach
your mind to be flexible blockbuster had
it happened many companies had it happen
I’m gonna be flexible I’m gonna be
malleable and I’m gonna be ready for the
future if I have to change something I’m
never gonna say I can’t I’m a video
renter with stores and that’s what I’ll
always be nope I’m a person with a
relationship with Americans that want to
love movies can you think if those two
attitudes were different
there you have it well anyway that’s the
blockbuster case study for this week and
of course as usual please subscribe to
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until next time with another case study
I’m Tom Ellsworth and I hope I left you better than I found you
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