The future is digital. We all know this but unfortunately Blockbuster didn’t learn this until it was too late.
Blockbuster is now sadly bankrupt and in its wake are several successful streaming players who are building up big subscriber-bases. As this infographic shows, in 2011 chief rival Netflix had more subscribers than the entire population of Australia!
Did you know Blockbuster turned down the chance to buy chief rival Netflix for just $50m? And not just once but multiple times. We’ve seen this kind of hubris and lack of foresight before when the RIAA went after Napster not realising this was a totally new technology and culture that they could have embraced. The repercussions of that mistake are still being felt today in the music industry.
So what can we learn from Blockbusters’ mistakes?
- Don’t get complacent – Its nice being at the top but it means the fall is awful long. Even Netflix is at risk here – all it takes is for a new rival to do what you do but cheaper, faster and better. Brand loyalty counts for something but don’t ever bet it on.
- Monitor trends – If you see that the public is embracing digital technology, if you can see that internet speeds and broadband penetration is increasing then it doesn’t take a genius to see that’s its an area worth investing in!
- And if you can’t predict trends at least be reactive – there’s little point waiting till everyone has put out their offering before you do yours especially if yours isn’t cheaper, faster and / or better. Risk assessment is essential yes, but to miss the boat entirely is pretty appalling.
And what can we learn from Netflix?
- Be flexible and scalable.
- Value exclusive content (not at the expense of other content but in addition to) – as more companies’ see you as a threat develop you own content that isn’t reliant on out licensing.
- Understand and learn what your customers REALLY want (even if they don’t always realise it themselves)
- Get your content out on as many platforms as possible! Just check out the number of devices that Netflix is available on – and that’s still growing every year.
We are getting to the point where streaming services like Hulu, YouTube, Netflix and LoveFilm are starting to feel like a real commentator to the traditional TV model. People are already ditching their cable and satellite subscriptions in favour of online platforms and that trend will only increase. This is also a boon for content creators – it’s never been easier to produce video content and get distribution (admittedly it’s still pretty tough!).
Opportunities exist that we only dreamed of before. But to take advantage you have to be forward-looking.
A great quote by Eric Shinseki sums it up perfectly:
“If you dislike change, you’re going to dislike irrelevance even more.”
So what do you think? Let me know below!
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