Kiosks are not the answer for Blockbuster

Tom Dougherty, CEO – Stealing Share

16 March 2010

Too late for Blockbuster

It’s a little too late for Blockbuster, I’m afraid. News that it will have kiosks at Sheetz convenience stores is an obvious attempt to cut into the market share of Redbox – but that’s not where the most market share lies.

Retailers like Blockbuster and f.ye. have found themselves with plenty of real estate property but not enough customers to justify it. Their stores have become increasingly empty and both are, in fact, reducing the size of their physical imprint. The kiosks are simply a way to make better use of a footprint.

Sound strategy, right? Maybe in the short term, although even then it’s shaky. It’s certainly not sound strategy in the long term.

A retailer like f.y.e. is failing because consumers don’t buy DVDs or CDs anymore. When they do rent them, they do it through other means: On Demand, Netflix, iTunes and even free downloading from places such as Hulu. That is, they download it straight to their TVs or computers.

DVD rental and purchasing is simply a dying model. Technology has reached the point in which consumers have more access – and control – to entertainment content than ever before.

What makes it doubly downcast for Blockbuster is that their brand is outdated. Its brand means archaic to consumers and it feels like a dying brand to them. Blockbuster was late to the downloading industry and getting into the game (as it has now) has been a losing effort because its brand doesn’t have permission to play. Downloading rentals from Blockbuster feels like taking fashion advice from your grandmother.

Kiosks are barely a stop-gap. Once that bump shrinks, Blockbuster will be looking for a new way. A brand that resonates with those who have already moved past Blockbuster is what’s really needed.

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It’s a little too late for Blockbuster, I’m afraid. News that it will have kiosks at Sheetz convenience stores is an obvious attempt to cut into the market share of Redbox – but that’s not where the most market share lies.

Retailers like Blockbuster and f.ye. have found themselves with plenty of real estate property but not enough customers to justify it. Their stores have become increasingly empty and both are, in fact, reducing the size of their physical imprint. The kiosks are simply a way to make better use of a footprint.

Sound strategy, right? Maybe in the short term, although even then it’s shaky. It’s certainly not sound strategy in the long term.

A retailer like f.y.e. is failing because consumers don’t buy DVDs or CDs anymore. When they do rent them, they do it through other means: On Demand, Netflix, iTunes and even free downloading from places such as Hulu. That is, they download it straight to their TVs or computers.

DVD rental and purchasing is simply a dying model. Technology has reached the point in which consumers have more access – and control – to entertainment content than ever before.

What makes it doubly downcast for Blockbuster is that their brand is outdated. Its brand means archaic to consumers and it feels like a dying brand to them. Blockbuster was late to the downloading industry and getting into the game (as it has now) has been a losing effort because its brand doesn’t have permission to play. Downloading rentals from Blockbuster feels like taking fashion advice from your grandmother.

Kiosks are barely a stop-gap. Once that bump shrinks, Blockbuster will be looking for a new way. A brand that resonates with those who have already moved past Blockbuster is what’s really needed.

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