Bankrupt Blockbuster: what went wrong?

You may have seen it coming some way off, but the US parent company of the Blockbuster rental company has gone into bankruptcy. Here are some ideas of what went wrong.

In the early days of the internet, it was thought that a High Street presence was important to complement trading via the internet. But Blockbuster have gone, and so have Barnes and Noble. Meanwhile, Love Film and Amazon continue to grow at a rapid rate. So a place on the High Street can’t be essential. Is it even desirable?

Blockbuster might yet last a while in the UK (where it continues as a franchise set up). But in the US the business was trapped by two competitors. One force is the online competitor Netflix and the other was Redbox which rents films for one dollar a night through kiosks in convenience stores.

Netflix has a vast selection of DVDs and is promoting the online streaming of older films, which subscribers will increasingly be able to obtain through internet-connected television sets. Redbox, in contrast, focuses on big films and recently-released DVDs which it rents out from vending machines for $1. Blockbuster was crushed in the middle.