October 11, 2010
Blockbuster goes bankrupt
And it's about time. Blockbuster always reminded me of HBO (I speak in the past tense because I haven't been inside a Blockbuster in years). Whenever there's a free HBO weekend preview, I wander over to take a look. I invariably come away thinking: Who pays extra for this?
I got the first DVD of The Sopranos from Netflix. I usually operate under the sunken cost fallacy that compels me to watch DVDs I've paid for, but couldn't force myself to watch the whole thing. Who cares about screwed-up thugs leading amoral and utterly boring lives? I don't get it.
Ditto Sex in the City. All I wanted to do was scream at Mr. Big: "Run! Run for your life!"
The local Blockbuster is located in prime retail space and yet always had a grundy, worn-down, seedy feel about it. A whiff of desperation seemed to permeate the premises even back before Netflix was founded in 1997. (The same vibe I get watching Sex in the City.)
But what really puzzled me about Blockbuster, back in its heyday, was how it was always "incentivising" but never innovating. Why didn't it have the equivalent of interlibrary loan? Why wasn't there an electronic card catalog? Small public libraries have had them for decades.
Why didn't Blockbuster beat Netflix to the punch? Because it was wedded to the same-old, same-old.
The same goes for Barnes & Noble. A bookstore is just a library where you can rent to own. For years, whenever I visited a B&N I thought: Where's the card catalog? Why make it so hard to find books? Why make it so hard to order them? Now I frequent B&N as often as I do Blockbuster.
The "traditional" publishers are headed down the same anti-innovation path as fast as they can run. Unfortunately, all we learn from the past is that nobody learns from the past. Or as Clay Shirky puts it: "Institutions will try to preserve the problem to which they are the solution."
If nothing else, dying U.S. businesses have time and again proved themselves preternaturally loyal to the problems killing them.