Comment on revenue, profit, and loss of key industry players.
SUMMARY:
We all know the rivalry between Netflix and Blockbuster. Netflix is undoubtedly the stronger contender, but for a while there (mid-2000s), it looked like Netflix and Blockbuster were neck-in-neck. Basically, Blockbuster started out as a DVD rental/retailer. It was doing pretty well; it was essentially the only one of its kind and dominated the market. In 2004, Netflix was born, and with it, the rise of DVD by mail. Now, in 2009 Blockbuster tried to jump on the bandwagon and rent out DVDs this way--by mailing them to consumers. But it was just too late. Netflix had already snatched up many of Blockbuster's old clients and created a name for itself in the movie distribution business.
In 2010, Blockbuster filed for Chapter 11 bankruptcy. Bankrupt, essentially defunct, and very sad, Blockbuster was bought by media provider giant, DISH Network. Thus, Blockbuster became an entity under DISH and no longer exists by itself as a company anymore.
OPINION:
It's hard to say whether Netflix bought about the demise of Blockbuster. Would Blockbuster still have gone bankrupt without the rise of Netflix? I think it's safe to say that it definitely wouldn't be making as much money as it was in the 1990s--but primarily due to the rise of piracy and illegal downloading on the internet.
What is most interesting to me, however, is that DISH Network acquired Blockbuster. Why would they want control over a dying company? It's still somewhat of a mystery--DISH believed it could resurrect the DVD rental store, it thought that Netflix was just a trend, it thought that it could compete price- and service-wise with the new Netflix? Regardless, DISH disregarded (or at least discounted) Blockbuster's consistent losses in revenue and decided to go ahead and take over the company. Now, Blockbuster is trying to steal Netflix's customers through Twitter campaigns and the like, but I don't actually think Blockbuster will ever be more profitable or desirable than Netflix.
SOURCES:
http://blogs.wsj.com/digits/2011/09/29/blockbuster-takes-to-twitter-after-netflix-stumbles/?KEYWORDS=blockbuster+netflix
It's interesting to read about what happens to companies which lose against a better opponent. I'd like to think that Netflix was one of the hugest causes for Blockbuster's bankruptcy, because they offered a better product - even with piracy being easier and more common, Netflix still has 24 million subscribers.
ReplyDeleteDish Network's buyout of Blockbuster is interesting. Perhaps they thought that it'd be cheaper to purchase Blockbuster in order to get more content than it would be to create a new company? I look forward to seeing if Blockbuster can make any sort of comeback, but it's doubtful.
I personally think that this battle is lost (well actually it's pretty obvious!) Perhaps Dish Network had a certain idea in mind, when it was purchasing Blockbuster? May be the purpose of it was not resurrect the DVD rental store or outru Nflix in future, may be Dish Network just wanted to profit from it somehow and if that's the case then they already had a plan in of how to do it prior to purchasing it.
ReplyDelete-Saida Khamidova