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The New Meaning of 'It is a Blockbuster': from Big to Bankrupt

|Includes: Blockbuster Inc. (BBI), BBI.B
The attached article indicates that Blockbuster, once the world's largest video rental company with a market value of almost USD 8.5 billion in 1994, will file for bankruptcy in September at a time when it's current market value (last calculations) indicate a mere USD 24 million value. That is indeed an almost -100 percent return for the owners who acquired the stake in the firm in 1994.

That is the world upside-down. People like me, non-native English speakers, had to learn what it meant when Americans were talking about a 'blockbuster' movie. Understanding that it meant something fantastic, namely that a movie was doing great in all those brick and mortar video rental shop branches of Blockbuster.

But the world has changed. And Entertainment and especially forms of media providing customers with Entertainment came to understand that these customers don't want to hassle of intermediaries where they could get their end product delivered. Online media or alternative, more cost- and time-efficient forms of product exchange replaced the old brick and mortar. In a similar way as what we now also see happening in the travel work, where traditional travel agencies are struggling.

It is a sad story on the one hand, but one that opens a window of new opportunities for those firms - be it in the West or in Emerging Markets - who understand that business models in several industries will be completely different when looking forward. The world is changing and in this changing world a lot of things will not be like they once were. Blockbuster found out the hard way.
Attachment: article about Blockbuster's demise on Fastcompany.com


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