Blockbuster, the nation’s biggest video rental chain store has recently filed for bankruptcy. Although it was a not a surprise since the news were already in circulation for the last few months that the retail chain is in dire financial strain due to its brutal competition with Netflix-the online rental company and Redbox, the $1 a day video rental kiosk placed almost everywhere.
The main thing that let it down was the competition with the Netflix. Since they do not charge late fees and also the rental market is being now eclipsed by streaming videos and they were unable to compete with that. As one of the articles recently mentioned that the future vision that companies need to have to see what is in store for them or what they see themselves in the future was not just there. The main problem was the late fees (which I also acknowledge is really the culprit). If you are going to rent a movie which is already expensive and on top of that if you forget or don’t have the time to return it, then it is better not to rent it in the first place or just buy it outright. And with the booming internet choices and on demand channels, there was no way for block buster with huge overhead to compete efficiently with the other main players. For now it blockbuster has to reduce its huge stores and concentrate on the internet and low rental and no late fees model.