28 Feb Article: What’s the next big company to go the way of Blockbuster?
I wrote this article that originally appeared on the BellMTS Business Hub blog. Writing on various business topics, I like to keep keenly aware of the landscape in many different industries. You can find this and more articles written by me on the BellMTS Business Hub.
There’s no question that the Internet has changed a lot about the way we do business and how we communicate with one other. From the rise of social media to the dissemination of current events, there’s been a true phase shift in our society over the past 25 odd years.
In her latest address in Winnipeg, CEO of General Electric Canada, Elyse Allan, said that “you can either be a disruptor or be disrupted,” meaning you can either be ready to take advantage of the next big thing, or you can get left behind. It’s a lesson some industries have unfortunately had to learn the hard way.
One that is often cited is Blockbuster Video. Less than 25 years ago, there were 9,100 stores across North America, renting movies and video games to loyal customers. Things were hunky-dory until a little company called Netflix came along. At first, Netflix mailed movies to people, cutting out the need for a storefront.
They soon took advantage of Internet streaming and a wide selection of movies rivalling Blockbuster’s, with clear advantages like instant access and never being out of stock. This ease of use and innovation helped Netflix gain over Blockbuster slowly but surely until Blockbuster was reduced to just 12 stores (albeit, nine of them are doing very well in Alaska). Meanwhile, Netflix enjoys huge revenue and has started film production on the back of their technology. This shows that industries and business models can be completely flipped on their head if they’re not ready for changes in technology or society.
It’s not the first time it happened and it likely won’t be the last. So which industry is next for a shakeup? It appears to be the big box retail stores.
You’ve likely seen stories of its effects: closures of local electronics stores, hundreds of closures of former household names like JCPenney and Sears, mergers between big brands — you name it. This was all in the name of staying afloat. What is driving it specifically?