retail news in context, analysis with attitude

by Kevin Coupe

Variety reports that Dish Network, which bought Blockbuster in 2011 for about $234 million, has decided to close the chain's 300 stores, as well as its DVD-by-mail business, by early next year.

At its height, Blockbuster had more than 9,000 stores. When Dish bought the company, it said it hoped to be able to turn it into a legitimate competitor to Netflix, which contributed to Blockbuster's demise with its DVD by mail offering, which has evolved into a dynamic streaming business that both generated exclusive content and a subscriber base that is larger than HBO's.

Some 2800 people will lose their jobs with the closures. However, Variety notes that "in an unusual move, stores that operate as licensed franchises will be able to remain open and operate under the Blockbuster name."

Joseph P. Clayton, Dish president and CEO, says that the company hopes to be able to leverage the Blockbuster name in digital offerings down the road.

Assuming, of course, that the Blockbuster name has any brand equity left … which is dubious, since the owners of Blockbuster seem to have spent much of the past few years doing its best to ignore the video content consumption trends that seemed pretty apparent to companies like Netflix, Apple and Amazon.

The Blockbuster case is a classic case of a company that practiced epistemic closure, looking at the world and seeing it as they wanted it to be, rather than as it was.

There's a great Jeff Bezos line that sums up what happened to Blockbuster. Asked about whether Amazon was destroying the book business, he said, no, it was the future that destroyed the book business.

The same could be said of the video business, and of Blockbuster, a company that owned the marketplace and then pretty much gave it away.

There but for the grace of God…
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