I'm reading a book about Blockbuster. Really eye opening. The main thesis is that it wasn't Netflix that did them in and if what this guy says is true he's right. Written by an executive from a former competitor that beat them in every market they competed in, he later went on to run some franchises who did things their own way.
All Blockbuster cared about was opening more stores. Management was not interested in learning about customer habits, what sold well, etc. They had all of this consumer data and it was never curated. By opening more stores it created the cash flow that wall st loved. That was the only goal. Hollywood Video, and their forerunner company, would simply open up a store near an existing Blockbuster, then beat them. One thing stood out. Rentals are divided into two categories. New Releases and Catalog. Blockbuster would rent all their moves for $3 and you got it 2 nights. Tapes cost around $65 so obviously you knew how many times you needed to rent for it to pay for itself. By far the busiest night was Friday. In Blockbuster they'd rent a new release for $3 and it's not back until Sunday. The other places would rent it for $2 for one night, and get it back Saturday. So that tape brings in $4 for a weekend, and two happy customers. Other places would also rent the catalog movies for $1. Not at blockbuster.
And their lack of interest in customer habits meant they bungled the transition to DVD. They couldn't even tell you what movies rented best in certain locations. Franchisees would build their own systems from .csv files and do it themselves. This isn't in 1985 either, it's 1997. So when the time came that DVD was king, Blockbuster was stuck with a bunch of VHS tapes. Their CEO figured customers would just take whatever was on the shelf. DVD was a gift to retail. Smaller to ship, cheaper to produce... it was a no brainer.
It's common knowledge that Netflix offered to sell to them, with the idea being those guys would run mail order (Streaming wasn't a thing yet) and Blockbuster would take over the physical side. Blockbuster not only declined, but the CEO gave them an eye roll. That just ticked them off and motivated them. They were almost religious in their data and algorithms so off they went.
Just an interesting business book. It rambles on a bit and probably could have fit into a 20 page term paper but whatever.