Wednesday, September 22, 2010

OK, I got this one completely wrong.

Blockbuster expected to file Chapter 11: source

I'm not saying that I didn't see this coming.  Everyone did, including Carl Icahn.  Blockbuster's recent half-hearted attempt to stay out of bankruptcy by closing stores should have been the wake up call.

But here's why I got this wrong:  10 years ago when the likes of drugstore.com, toys.com, and pets.com (I still have the sock puppet) went away in favor of CVS, Walmart, and Petsmart my thinking was that the brick-and-mortar businesses were going to win out over the straight online companies.  I still thought this last Christmas even as I did all my shopping on Amazon.com and I haven't been into a Barnes & Nobel except to buy a coffee or use the restroom in 12 years.

I really predicted BB would win out over Netflix.  It seemed like BB was in a perfect position and could do everything that Netflix could deliver but you could still return a movie to a store and go home with a new movie that day.  There was not a single competitive advantage that Netflix had that Blockbuster couldn't duplicate almost instantly.  And yet, here we are.  I guess I should have had a clue when a friend of mine told me he was paying $9.99 / month for Netflix and my monthly bill to BB was $25.00.  When I realized that I hadn't watched a movie in 3 months I did cancel my service.

Marc
http://www.marcbpetrinecpa.com/

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