Is there any fixing Blockbuster’s business model? Last week it was rumored that Blockbuster might be filing for bankruptcy. As I went to return a couple movies I rented over the weekend, I found this.
In Blockbuster’s glory days, this very store had deep lines nearly every day of the week. How could this happen? The answer is more than technological obsolescence. Blockbuster is in the cheap entertainment business. Scratch that, Blockbuster used to be in the cheap entertainment business and have an 80% market share. Today, RedBox (a division of Coinstar) rents $1 movies that cost $5 at Blockbuster. It appears that RedBox is in the cheap entertainment business and Blockbuster is not.
In the good old days Blockbuster was in the convenient entertainment business. There was no need to go to wait in line at the movie theater. You could stop in and rent a movie playing it at your convenience. Today, Netflix is in the convenient entertainment business. Netflix drops movies conveniently in your mailbox vs. parking your car and waiting in line at Blockbuster.
Let Blockbuster’s woes be a lesson. If you don’t modify and morph your business model, your competitors will. The best business model always wins. Let’s make sure you always have the best business model.
The way to insure you have a fresh and powerful business model is to constantly challenge your previous assumptions. There are dozens, perhaps hundreds of assumptions in your current business model. Assume nothing! Challenge every minute detail of your business model and take the time to wonder “what if.” All the great business ideas were a bit odd at the beginning. It was odd to think of getting cash from a machine instead of a teller. It was odd to think of pumping your own gas. It was odd to consider a personal computer instead of a typewriter. Great ideas never seem great until they work. Until that time, they seem risky and weird. Take some chances with your business model and go for the weird every now and then.
