Internet killed the video star

Blockbuster Entertainment Inc, or simply Blockbuster, as it was known to millions of fans, never opened in Bangladesh, but it really should have: with its shelves chock full of VHS videos and DVDs, friendly customer service, and round the clock opening hours, it would have been perfect for most bored Dhaka-ites on any given day of the week.  Also, the fact that most deshis are remarkably brand loyal may have worked in its favour, especially towards the end.  Instead, Blockbuster rose and fell in one of the most competitive markets in the world where consumers ultimately chose convenience over sentimentality.   Opening credits The first ever Blockbuster store opened in Dallas, Texas, in the mid 80s. David Cook, founder of the company, still speaks with pride about how he detected a market niche where none saw any. “VHS was still a very new technology, having just beaten Betamax out of business, and businesses were still afraid as to how to best go about making money out of it. I immediately saw an opportunity: Americans love their entertainment rolled up with convenience, so why not open a store that does just that?” said Cook in an interview with New York Times earlier this year.   A winning streak By convenience, Cook meant customisation, as each Blockbuster store fit like a chameleon in just about any neighbourhood. Small suburbs in the Midwest tended to carry more family dramas, while the bigger stores in urban city squares had everything from horror to foreign films. Convenience translated to profits, and by the early 90s, Blockbuster had more than 250 stores across the US, taking over many smaller chains and franchises.   Success was sustained through the early part of 2000, when the company, now renamed Blockbuster Inc, ventured across the pond and opened up chains in the UK and Ireland (though the Irish arm of the business would be sold off a couple of years later). It had diversified its products by offering DVDs and even video games for rent and sale, and would also often link up with local fast food chains to offer its customers a more “complete” package.   Internet? Bah, humbug In 2001, a small company called Netflix, less than a year old and offering videos on the internet for a paid subscription, offered itself to Blockbuster for a measly $50 million. James W. Keyes, the then CEO of Blockbuster, turned them down instantly: “Who wants to watch videos on a laptop screen and pay for it?”  He would know the answer to that question soon enough.   Brick and mortar strategy Keyes, who had gained eminence as a successful CEO of 7-11, was appointed as the new leader for Blockbuster in late 2001, and brought with him his tried and tested methods from running a hugely successful chain of convenience stores into the entertainment chain. His basic business principle was this: the actual shopping experience for consumers wanting to rent and buy games and videos is just as important as the video they end up watching at home.   That philosophy seemed to make sense at the cusp of the dot com bust as people started to see technology with renewed skepticism, and Keyes’ deemphasising online services for a more “hands-on” customer experience within the store itself—Blockbuster stores offered movie-theatre styled ticket counters, along with vending machines and pop corn stalls—seemed more intuitive rather than a stroke of against-the-grain genius.    Blockbuster, meet Netflix But of course, consumers always seem to be one step ahead of market gurus, and Keyes’ decisions to move away from online-based consumer interface to more brick-and-mortar old fashioned retail gave space to cyberspace-habiting companies like Netflix and Amazon.    From 2007 to 20011, Blockbuster closed off more than half of it chains nationwide, along with its flagship store in Texas. Keyes frantically began to woo customers who were increasingly looking to buy entertainment online with downloadable coupons and even home delivery of videos with unlimited return times. But it was all too little too late.  The iceberg had struck the Titanic and there were no lifeboats left.  On September 2010, Blockbuster went belly up and filed for Chapter 11 bankruptcy, and finally on November 6 of this year, the last ever Blockbuster store in Ypsilanti, Michigan, was closed off for operations. How apt that the last ever DVD it rented out