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Why Did Blockbuster Fail? They Didn't Care About Customer Feedback

23 points by Helprace 10y ago

sickbeard 10y ago
it may be part of why the failed but it's not why they failed
e40 10y ago
If you screw over your customers, they will be customers only as long as it takes them to find an alternative to your service or product.
peter303 10y ago
Blockbuster began before there was the web. The web is great help for feedback. Also Redbox came along skimming its 90/10 business at a third of the price 10% of the titles have 90% the rentals.
jgon 10y ago
Blockbuster failed for many reasons of their own doing, but I think that it is overlooked that they also failed because they couldn't outlast several years of Netflix dumping VC cash into a fire for good content. Now, in the classic SV "disruption" playbook, Netflix has stopped paying for quality content, excluding their own mostly mediocre content, and I am left wish that the blockbuster near my house was still open so that I could go out and rent a decent movie. So much of the Netflix catalog is absolute bargain basement garbage these days and it doesn't look like that is about to change anytime soon. Maybe one day we'll be able to access quality content from the big players, but I think there's an equal chance that we'll look back at a time when you could go and get access to a ton of classic movies from any studio and almost any time period without having to buy it upfront in a single consolidated location and feel like we've really lost something with our current state of affairs.
- blakesterz 10y ago
  >> several years of Netflix dumping VC cash into a fire for good content. I can't say I agree with much of your comment, I find much of their content decent enough, but I'd never thought about the VC cash thing before. I don't know how much they burned, but it's interesting to think the only reason they were able to pull this off is because they were able to lose a ton of money this way. Blockbuster being public at the time wouldn't have been able to? (don't know how true either of those things are)
- eli_gottlieb 10y ago
  Doesn't that mean Netflix basically used really old-fashioned anticompetitive practices that are banned by law in a lot of places?
MBCook 10y ago
What feedback, exactly, did Blockbuster ignore that caused them to go under? The article doesn't seem to actually show any examples of missed feedback. There are some generic things about Apple being good and thinking of things other people didn't, but not concrete examples of customer feedback being missed. Furthermore, I'm sure there are examples of companies following customer feedback and it making things worse. JC Penny and their giant discount sales, perhaps? There are no examples of that in the article. Just seems short on substance, basically "feedback is good".
- jasode 10y ago
  >Just seems short on substance, basically "feedback is good". Which isn't unexpected because the company's webpage (http://helprace.com http://helprace.com) says they sell a customer "feedback portal".
  - Pigo 10y ago
    Don't be the next Blockbuster, Borders Books, or AOL, buy our customer feedback product!
- dangerboysteve 10y ago
  Why this trended up is beyond me. It's thinly veiled marketing supporting an argument for their own products.
- Yhippa 10y ago
  TL;DR: Blockbuster went under because they failed to systematically read minds and take actions on it.
- jasonkostempski 10y ago
  There was only 1 good feedback option "dump your core business and do something completely different." They ignored that.
mkozlows 10y ago
Hot take: Blockbuster failed because their business was renting physical media, and then physical media went away, and it turned out that being good at renting physical media didn't give you any particular skill or expertise at running a digital video streaming site.
- narrowrail 10y ago
  I agree. That, and they alienated their customers with exorbitant late fees.
- joe_momma 10y ago
  It happened before they became a streaming service, that was just the nail in the coffin. Blockbuster lost the distributor battle long before they even attempted a streaming service.
- trjordan 10y ago
  Netflix was originally in the business of renting physical media as well.
jbarbs 10y ago
Very superficial analysis. The article goes on about a bunch of generic things but it doesn't really address the particular issue outlined in its title: Why did Blockbuster fail?
will_brown 10y ago
Blockbuster was owned by the Wayne Huizenga an interesting businessman and notorious South Florida character. Its hard to ignore the most important thing is he sold Blockbuster to Viacom for $8.4B in 1994. Some say he had the foresight to see the writing on the wall, but I'm not sure that is the case and remember reading (if anyone can find it) about his preference for subscription based business models - Blockbuster late fees was the best they can come up with, which is nostalgic even to write, looking back they could have done a Seinfeld episode about the Blockbuster late fee) and so he was inclined to shed the business. If he had really seen the writing on the wall, he likely would have sold and/or just started the first subscription based movie rental by mail website (a la netflix).
tommeader 10y ago
I found this a video about the rise of Netflix talks a lot about Blockbuster and their downfall: https://www.youtube.com/watch?v=BrpEHssa_gQ https://www.youtube.com/watch?v=BrpEHssa_gQ
hodder 10y ago
When blockbuster was nearing its final days one location in my city was purchasing DVDs for $5/DVD. Another location was SELLING DVDs for $3/DVD. We filled a van with DVDs and arbitraged them. After that experience, I became convinced Blockbuster's failure was due to gross incompetence. If I ever apply to Ycombinator, I think this would be my "interesting hack" on the application.
- M_Grey 10y ago
  I worked briefly at a Blockbuster as a teen, and it was the worst job I ever had. Everyone stole, the manager stole boxes full of candy, nobody tried to do their job even remotely. It was the most dispiriting and incompetent place I've ever been; I quit within a month.
joe_momma 10y ago
It was obvious why Blockbuster failed. Their infrastructure and cost to do business was much greater than 3 warehouses centrally located. Don't forget NetFlix was a DVD distributor before it became a streaming service. So there are multiple layers to "WHY" Blockbuster failed... This article doesn't even seem to touch on anything significant.
skywhopper 10y ago
Weird that the chart of companies that broke the paradigm of some predecessor includes Samsung vs Apple in the same lineup with Blockbuster vs Netflix. Samsung has its problems but it's not in the same class as Blockbuster. Blackberry seems like the correct analogue to Apple in that comparison.
larrik 10y ago
This article was vapid and nonsense, and Apple's inclusion makes no sense at all (I mean, if there was ever a company to disprove their points...). I mean, they pit Barnes & Nobles (which hasn't failed yet) vs Amazon? Ignoring Borders? Likewise, Taxi's haven't failed, and aren't really looking like they will, either. It's pretty rare that I wish for a downvote button on posts on HN.

23 points by Helprace 10y ago

it may be part of why the failed but it's not why they failed

e40 10y ago

If you screw over your customers, they will be customers only as long as it takes them to find an alternative to your service or product.

peter303 10y ago

Blockbuster began before there was the web. The web is great help for feedback. Also Redbox came along skimming its 90/10 business at a third of the price 10% of the titles have 90% the rentals.

jgon 10y ago

Blockbuster failed for many reasons of their own doing, but I think that it is overlooked that they also failed because they couldn't outlast several years of Netflix dumping VC cash into a fire for good content. Now, in the classic SV "disruption" playbook, Netflix has stopped paying for quality content, excluding their own mostly mediocre content, and I am left wish that the blockbuster near my house was still open so that I could go out and rent a decent movie. So much of the Netflix catalog is absolute bargain basement garbage these days and it doesn't look like that is about to change anytime soon. Maybe one day we'll be able to access quality content from the big players, but I think there's an equal chance that we'll look back at a time when you could go and get access to a ton of classic movies from any studio and almost any time period without having to buy it upfront in a single consolidated location and feel like we've really lost something with our current state of affairs.

blakesterz 10y ago
>> several years of Netflix dumping VC cash into a fire for good content. I can't say I agree with much of your comment, I find much of their content decent enough, but I'd never thought about the VC cash thing before. I don't know how much they burned, but it's interesting to think the only reason they were able to pull this off is because they were able to lose a ton of money this way. Blockbuster being public at the time wouldn't have been able to? (don't know how true either of those things are)
eli_gottlieb 10y ago
Doesn't that mean Netflix basically used really old-fashioned anticompetitive practices that are banned by law in a lot of places?

MBCook 10y ago

What feedback, exactly, did Blockbuster ignore that caused them to go under? The article doesn't seem to actually show any examples of missed feedback. There are some generic things about Apple being good and thinking of things other people didn't, but not concrete examples of customer feedback being missed. Furthermore, I'm sure there are examples of companies following customer feedback and it making things worse. JC Penny and their giant discount sales, perhaps? There are no examples of that in the article. Just seems short on substance, basically "feedback is good".

jasode 10y ago
>Just seems short on substance, basically "feedback is good". Which isn't unexpected because the company's webpage (http://helprace.com http://helprace.com) says they sell a customer "feedback portal".
- Pigo 10y ago
  Don't be the next Blockbuster, Borders Books, or AOL, buy our customer feedback product!
dangerboysteve 10y ago
Why this trended up is beyond me. It's thinly veiled marketing supporting an argument for their own products.
Yhippa 10y ago
TL;DR: Blockbuster went under because they failed to systematically read minds and take actions on it.
jasonkostempski 10y ago
There was only 1 good feedback option "dump your core business and do something completely different." They ignored that.

mkozlows 10y ago

Hot take: Blockbuster failed because their business was renting physical media, and then physical media went away, and it turned out that being good at renting physical media didn't give you any particular skill or expertise at running a digital video streaming site.

narrowrail 10y ago
I agree. That, and they alienated their customers with exorbitant late fees.
joe_momma 10y ago
It happened before they became a streaming service, that was just the nail in the coffin. Blockbuster lost the distributor battle long before they even attempted a streaming service.
trjordan 10y ago
Netflix was originally in the business of renting physical media as well.

jbarbs 10y ago

Very superficial analysis. The article goes on about a bunch of generic things but it doesn't really address the particular issue outlined in its title: Why did Blockbuster fail?

will_brown 10y ago

Blockbuster was owned by the Wayne Huizenga an interesting businessman and notorious South Florida character. Its hard to ignore the most important thing is he sold Blockbuster to Viacom for $8.4B in 1994. Some say he had the foresight to see the writing on the wall, but I'm not sure that is the case and remember reading (if anyone can find it) about his preference for subscription based business models - Blockbuster late fees was the best they can come up with, which is nostalgic even to write, looking back they could have done a Seinfeld episode about the Blockbuster late fee) and so he was inclined to shed the business. If he had really seen the writing on the wall, he likely would have sold and/or just started the first subscription based movie rental by mail website (a la netflix).

tommeader 10y ago

I found this a video about the rise of Netflix talks a lot about Blockbuster and their downfall: https://www.youtube.com/watch?v=BrpEHssa_gQ https://www.youtube.com/watch?v=BrpEHssa_gQ

hodder 10y ago

When blockbuster was nearing its final days one location in my city was purchasing DVDs for $5/DVD. Another location was SELLING DVDs for $3/DVD. We filled a van with DVDs and arbitraged them. After that experience, I became convinced Blockbuster's failure was due to gross incompetence. If I ever apply to Ycombinator, I think this would be my "interesting hack" on the application.

M_Grey 10y ago
I worked briefly at a Blockbuster as a teen, and it was the worst job I ever had. Everyone stole, the manager stole boxes full of candy, nobody tried to do their job even remotely. It was the most dispiriting and incompetent place I've ever been; I quit within a month.

joe_momma 10y ago

It was obvious why Blockbuster failed. Their infrastructure and cost to do business was much greater than 3 warehouses centrally located. Don't forget NetFlix was a DVD distributor before it became a streaming service. So there are multiple layers to "WHY" Blockbuster failed... This article doesn't even seem to touch on anything significant.

skywhopper 10y ago

Weird that the chart of companies that broke the paradigm of some predecessor includes Samsung vs Apple in the same lineup with Blockbuster vs Netflix. Samsung has its problems but it's not in the same class as Blockbuster. Blackberry seems like the correct analogue to Apple in that comparison.

larrik 10y ago

This article was vapid and nonsense, and Apple's inclusion makes no sense at all (I mean, if there was ever a company to disprove their points...). I mean, they pit Barnes & Nobles (which hasn't failed yet) vs Amazon? Ignoring Borders? Likewise, Taxi's haven't failed, and aren't really looking like they will, either. It's pretty rare that I wish for a downvote button on posts on HN.