Look at blockbuster video. They were a very successful store for a long time. They were so successful that they were able to raise their rates to the most expensive place to rent movies. Sure redbox and netflix came along and took away the customers that didnt want to leave their house and the people that dont mind a weak selection for a cheap price, but thats not what brought Blockbuster down.
What brought them down was rent 1-3 movies per month for a set fee, no late fees,keep the movies as long as you want. This was a hugely bad idea and I dont know why they didnt see it.
People were always complaining about late fees. Some people even stopped going to blockbuster because of the late fees. So what did they do? Got rid of late fees. First they started letting people rent movies longer...instead of holding them 2-3 days, they let them hold them all week. Now with the subscription service, you can hold them indefinately. Now im sure some idiot over there at corporate said "Hey...we get them to pay a monthly fee whether they rent or not!" and of course all the board members cheered because they are idiots.
What they failed to realize is that a monthly fee will ensure that customers always have 1 to 3 movies in their possession at all times, whether or not they want to watch them. This mean 1 to 3 movies off the shelves at all times, so its really hard to get the movie you want because its never there.
Most of us know that you have to rent about 6 or 7 movies in a month before the membership subscription pays for itself, but that makes no difference to blockbuster which they failed to realize. If someone gets the unlimited in-store exchanges 2 movies out for 30 bucks per month, then it doesnt matter if the guy rents 2 movies per month, or 60 movies per month. Their will always be 2 movies out and it doesnt matter that its the same title. The shelves will have 2 less movies at all times which comes out to a daily rate of 50 cents per movie. The customer doesnt realize he is paying 50 cents per movie per day because he doesnt do the math...Obviously blockbuster didnt do the math either and didnt realize they were renting movies for 50 cents per day while at the same time taking movies off the shelf which in turn led to people leaving blockbuster because they couldnt get the movies they want.
Netflix and redbox were never going to take away all of blockbusters market share,just a portion of it, and the people crying about late fees and prices, and threatening to go "somewhere else" caused blockbuster to wreck their already proven business model.
The US was a proven business model, with a constitution that worked. The people cried for this and that and the other and the US listened and now you have a nearly bankrupt economy.
We were the most powerful and richest country and people in the world and people just didnt get it that when you are the best, there is nothing to fix...but the people wanted more and now they are getting less. Just like blockbuster.
Peilthetraveler
What brought them down was rent 1-3 movies per month for a set fee, no late fees,keep the movies as long as you want. This was a hugely bad idea and I dont know why they didnt see it.
People were always complaining about late fees. Some people even stopped going to blockbuster because of the late fees. So what did they do? Got rid of late fees. First they started letting people rent movies longer...instead of holding them 2-3 days, they let them hold them all week. Now with the subscription service, you can hold them indefinately. Now im sure some idiot over there at corporate said "Hey...we get them to pay a monthly fee whether they rent or not!" and of course all the board members cheered because they are idiots.
What they failed to realize is that a monthly fee will ensure that customers always have 1 to 3 movies in their possession at all times, whether or not they want to watch them. This mean 1 to 3 movies off the shelves at all times, so its really hard to get the movie you want because its never there.
Most of us know that you have to rent about 6 or 7 movies in a month before the membership subscription pays for itself, but that makes no difference to blockbuster which they failed to realize. If someone gets the unlimited in-store exchanges 2 movies out for 30 bucks per month, then it doesnt matter if the guy rents 2 movies per month, or 60 movies per month. Their will always be 2 movies out and it doesnt matter that its the same title. The shelves will have 2 less movies at all times which comes out to a daily rate of 50 cents per movie. The customer doesnt realize he is paying 50 cents per movie per day because he doesnt do the math...Obviously blockbuster didnt do the math either and didnt realize they were renting movies for 50 cents per day while at the same time taking movies off the shelf which in turn led to people leaving blockbuster because they couldnt get the movies they want.
Netflix and redbox were never going to take away all of blockbusters market share,just a portion of it, and the people crying about late fees and prices, and threatening to go "somewhere else" caused blockbuster to wreck their already proven business model.
The US was a proven business model, with a constitution that worked. The people cried for this and that and the other and the US listened and now you have a nearly bankrupt economy.
We were the most powerful and richest country and people in the world and people just didnt get it that when you are the best, there is nothing to fix...but the people wanted more and now they are getting less. Just like blockbuster.
Peilthetraveler
