Lessons Learned in Responding to Change


Remember Blockbuster?

In the 1980sBlockbuster video rental company introduced an innovative barcode tracking system to charge late fees for all their video rentals. The late fee tracking system was so successful that Blockbuster reported earnings of $800 million in just one year alone.  Around 1998, Blockbuster pioneered an emergent on-demand video technology, and research indicated a healthy consumer appetite for this service. But while the landscape was shifting, Blockbuster was short-sighted, choosing to ignore opportunities to implement innovative change, and it did little to adapt. Instead, Blockbuster decided to cling to stability, looking for nominal gains in efficiency and productivity by building new stores, increasing video selections, and continuing to charge late fees for video rentals.

The NETFLIX disruption

Enter Netflix in 1997.  Netflix waived late fees, allowing consumers to return videos by mail whenever they wanted and provided online video selections.  

Sick and tired of the late fees, consumers recognized that Netflix had created a better service and started to abandon Blockbuster.

By 2000, Netflix offers to sell their company for $50M (USD) to Blockbuster.  Blockbuster's CEO Mr. Antioco declines thinking Blockbuster's business model is foolproof.  


The impact of Blockbuster's inability to adapt and change sounded its death knell. By 2010, Blockbuster, the once multi-billion-dollar company with over 9,000 stores worldwide, filed for bankruptcy and shuttered its doors.  


Ash, A  (2020, August). The rise and fall of Blockbuster and how it's surviving with just one store left. Business Insider.  https://www.businessinsider.com

MarketPlace.org (2020, September). CEO Reed Hastings on how Netflix beat Blockbuster. Marketplace. https://www.marketplace.org


The success and stability of the past may no longer apply, causing inflexible organizations to "go the way of Blockbuster."

Every organization deserves a contemporary, customized change plan.