The Fall of Blockbuster Video: How Rejection of Culture Shifts can upset the Media Distribution Landscape

Abstract

Established in the fall of 1985, Blockbuster LLC was the leading provider of media rental services by the mid-1990’s. The media giant was a forced to be reckoned with, revolutionizing the way families would enjoy their weekend movie nights (Time, 2010). From the newest movie releases to hit video games, a trip to Blockbuster was the highlight of every 90’s kid weekend.

However, in the late 1990’s and early 2000’s, Blockbuster was met with an increased demand for updated technology integrated with their decreasingly popular video services. Streaming services such as Netflix and rental kiosks such as Redbox challenged Blockbuster to adapt to the changing media landscape. By the fall of 2010, they had filed for bankruptcy and had become a example to businesses for the future.

Looking at Blockbuster’s rise through technology innovation and creativity in marketing, it’s easy to believe that the company would have adjusted well with the increased on-demand services. However, due to poor business decisions and the company’s disregard of important cultural shifts, the company was left only for the last minute hope of buy outs and mergers. Liedke and Anderson explain Blockbuster’s most recent attempt to get back on top, explainging that the company’s “decade-long downfall from video-rental powerhouse to has-been is a story of how shortsighted management and corporate arrogance helped turn a couple of brash upstarts into the new stars of home entertainment (p. 1).”

Blockbuster became another in the ranks of other companies such as Kodak and Borders, to fail to adapt to the changing demands in their respective industries. The willingness to adapt to changing technology and the demand for faster and better products has become an integral part of any business plan. These companies, although innovative at the time of their launch, failed to recognize the changing business landscape and missed their opportunity to “outrun” the competition. Blockbuster fell into the trap of complacency, as Arnett, Fritz, and Bell explain, stating that “a company without clarity of direction falls prey to atrophy and decline, unable to engage in self-critical examination and change (p. 180).” Although their business systems were built on previous successes their inability to adapt to changing culture shifts ultimately led to the company’s demise.

In this paper, we will be studying Blockbuster’s case, focusing on the democratic and contextual approaches to communications ethics while using the sociocultural and cybernetic approaches to further understand the interaction between cultural and professional decision-making.

Keywords: Blockbuster, public testing, communication ethics, media distribution.