Back to the Future? No wonder the stock is at $2.58...
How many of you remember when video stores entered the American landscape in the 1980s? At a time in the not so distant past, you’d be hard pressed to find a strip mall in America without one. When they first opened, a family had to become a “member” of the video store. This entailed paying an initial membership fee of several dollars. In many cases, the more “members” a family had the more in up-front membership fees a family had to pay. So to be clear, one had to pay to have the right to shop at a video store. Sounds outdated, doesn’t it? (listen up, COSTCO). Let’s fast-forward from your first card to the past several years. The options have flourished, haven’t they? Yes, you can still go to your convenient, local Blockbuster Video but you have several other options available, too. That’s a lot of alternatives for filmed entertainment, wouldn’t you say? Some more compelling than others for some of us, but a healthy list of options. I would imagine this would be quite a threat to a traditional brick-and-mortar video rental store like… well, Blockbuster Video. I won’t go into the list of options that the Dallas-based company has tried over the past few years (remember the video-on-demand deal with ENRON?) but this healthy dose of competition would First, it must be aimed at potential new customer because current customers already have a membership... right? And second, it is front and center of all storefront windows (the four stores that I saw last weekend). Not THE END OF LATE FEES (no, wait, that one didn't stick around). Not it's UNLIMITED GAMES RENTAL (dammit, that one's gone, too). What do they have? I guess just this... promoting the fact that you can now rent from their stores without paying a membership fee. Just like you could have for the past decade-plus. Just like any other brick and mortar video store in America. This isn't differentiation... this isn't even an attempt at differentiation. This is a complete waste of resources. Is it any wonder that the below graph looks like it does? IF YOU HAVE READ THIS FAR, PLEASE TAKE A MOMENT TO COMMENT... THE VALUE IS IN THE CONVERSATION, NOT MY RAMBLINGS... For those of you who grew up entirely in the Age of Blockbuster (and followed by Hollywood Video and Movie Gallery), I can imagine this is a relatively foreign concept. But remember when you got your first Blockbuster card? You had to fill out paperwork, show a credit card and driver’s license, and in exchange you received a laminated card (or key ring membership card) and the ability to rent from your convenient, local Blockbuster Video store.
certainly have me experimenting with products and programs that would allow me to differentiate from the crowd and really play to my strengths. So imagine my surprise when I came across this local Blockbuster store’s window dressing (and by the way, it was the same in four stores that I drove by this weekend). To lure in new customers, Blockbuster is prioritizing and strongly promoting the fact that it offers FREE MEMBERSHIPS. The message that Blockbuster is telling the world is that this is our best effort to grow our business from a new customer perspective. How can I be so confident about this?
