Van

The Contrast Between Blockbuster and Netflix

Right you are, cank. And the short play -- and the size of the digital footprint as the future of entetainment and media -- is and will be even more crucial. Consider how many FREE options are now flooding the market already, enabling free television, movies and video viewing online. It's intended to change behaviors up front, in order to monetize it within a successful business model later. Much like Napster harked the paradigm shift before Apple's iTunes. People still buy CDs, cassettes and LPs, though -- thanks to the long tail created by cheap distribution. But - that's changing, too -- thanks to $5.00 a gallon for gas/$140 barrel, impacting shipping costs.

The market for video entertainment has many tentacles. Blockbuster's position has always been one based in Real Estate - they're like McD's (What's McD's business model? It ain't selling burgers -- they buy and own real estate, and pay for it by selling burgers). As long as the rent is being paid on their buildings, and it is, BB owns land. They also have a recognizable brand (albeit outdated with many customers leaving and no new ones coming). There are always customer segments willing to use outdated modes of commerce. My mother (78) still uses travel agents! While BB will need to act to remain competitive, they've always moved slow to protect their physical holdings.