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There’s Blockbuster. Keeping a broad inventory is a lot of work and expense. It’s easier, and more favorable to revenue, to stock only the most popular stuff. A

There’s Blockbuster. Keeping a broad inventory is a lot of work and expense. It’s easier, and more favorable to revenue, to stock only the most popular stuff. Also, you can definitely make a ton of money by charging late fees. Hmm. The only problem there is that Blockbuster just filed for bankruptcy. Do you really think they would be in better financial shape if they had sunk more money into low-perfoming inventory and waived all the revenue that comes from late fees? Blockbuster's problem is that its business model was past its expiration date, due to a disruptive technology in the market. Their failure is due to their failing to respond adequately to this. They provide no probative evidence with regard to how "dicking your users" will cause your business to fail.

danilocampos 16y ago
Blockbuster's problem was that it was indifferent to its users and it got lazy. They optimized for their short-term goals, not the long term relationship with the people they needed most. Any user focused company stays busy trying to obsolete its current business with the next big thing, because that's what the user wants. It didn't kill itself on late fees or inventory myopia alone — it just painted the target on its back. If Blockbuster were genuinely interested in making their users happy toward the end, they could have bought Netflix for a cheap $50 million and moved forward. They didn't care, and their user hostile approaches to making cash were evidence this was true.