blockbusterAt Stealing Share, we talk a lot about the difference between branding and using table stakes to compete  (i.e. banks offering free checking or a lot of ATM’s). Table stakes are merely the costs of entry, and should not be the framework of any company’s brand.

This brings me to Blockbuster, a once dominant company that is now on the verge of collapse due to years of focusing on creating efficiencies and not on building its brand. The problem with this method is that it is only a matter of time before competition finds its way in and you are unable to adjust to market forces.

At one point, Blockbuster was able to keep competition at bay through market saturation and pricing. While both are important, they are table stakes. All consumers would like to have their video store close, be able to rent for less and to return with no late fee. These should be the bare minimum requirements for any company in the video rental business.

The fact that Blockbuster built its strategy based on these factors meant that any competitor who could be even more efficient could have a leg up and that is just what companies like Netflix and Redbox have done. In addition, any competitor that was at least as efficient would emerge if it had a brand that target audiences coveted. That would be Apple.

Blockbuster cannot compete on location with Netflix’s home delivery. On price, Blockbuster’s brick and mortar cannot undercut the $1 rentals available from a Redbox kiosk.

I would like to think that Blockbuster might see the importance of creating a meaningful brand to stimulate preference, but alas it does not appear to be the case. Over this past year, Blockbuster has focused its energy on closing many of their stores, pushing their DVD by mail service, implementing a Blockbuster OnDemand streaming service, and distributing movies through new Blockbuster branded Kiosks.


In their final attempt to rise from their recent bankruptcy filing, Blockbuster has again overlooked the importance of creating brand equity and has instead thrown their hat into every possible distribution method it can in the hopes that something works. Sadly, its underdog story severely lacks the sympathetic appeal fit for Hollywood. It is no Rudy.