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Might As Well Close That Barn Door, Blockbuster

March 25, 2010

Blockbuster, yes. Night, yes. Making it a Blockbuster Night, not so much.

Blockbuster is drowning in 1 billion dollars in debt and like the recording industry they’ve long been students of the “One person closes the barn door and three people chase the horse down the street” school of business management.

In his fantastic piece exploring the music industry’s latest attempt to keep CDs relevant called Music Industry Drops CD Prices – Too Late, Damon Brown says of the Johnny Come Lately prescriptive approach:

It’s commendable that the largest music conglomerate, as well as other music companies, has realized that 25% of something is better than 50% of nothing. The problem is it should have happened at least three years ago. When it comes to CD sales, hopefully they’re not expecting a miracle — because there won’t be one.

Blockbuster’s latest venture – rolling out Redbox style kiosks – seems to be another shining example of clearly not getting the point. As a film fanatic and an former Blockbuster customer, none of their new business tactics are going to attract my dollars. I don’t care if they put a kiosk in my bathroom; I’d never use their products/services again. Here’s why:

• In January of 1994, a week after the Northridge Earthquake, Blockbuster charged my mom’s account $109.50 for the destroyed VHS copy of The Crush, when we were finally able to contact them and let them know what had happened. Never mind the valley looked like a war zone, people were living in tent cities in Petit Park or the fact that previously we had been good and loyal customers. No, there were no accommodations made for our circumstances.

• In the summer of 1995, my car was broken into IN MY CARPORT and my bookbag – housing a VHS copy of Terms of Endearment – was stolen. Again, despite proper documentation, Blockbuster was unmoved by my plight and painfully liberated $74.95 from my wallet.

• In the fall of 2007, I returned a copy of Midnight Run to the wrong store and despite correcting my mistake, which involved an hour of searching the store for the DVD only to find it on the manager’s desk with a note saying, “Do not charge customer’s account” – Blockbuster still felt $29.99 was an appropriate punishment.

To be sure, folks do need to be held accountable in cases of neglect, theft or intentional destruction of property. However, neither of the three examples would be indicative of such. Moreover, these are hardly isolated events. Multiply my own losses times the numerous customers with matching tales of woe, who have opted to kick Blockbuster to the curb and most likely you’ll find a decent chunk of that 1 billion dollars.

In writing this entry, I spoke to several former Blockbuster customers who offered similar tales of unreasonable fees, unhelpful customer service reps and billing mistakes, which often involved weeks of phone calls, emails and frustration before being corrected.

Analysts can do all the chow chowing they wish, but Blockbuster’s woes cannot be entirely attributed to shifts in customer viewing habits or new technologies. Customer service – rarely mentioned when companies face economic hardships – is a large factor in the equation and should not be ignored.

Ask Circuit City. When Circuit City instituted its wage management initiatives and fired over 3k of its workforce in favor of cheaper, less knowledgeable sales staff, they were rewarded with an embarrassing erasure from the marketplace

Customer service matters, as much as having the latest, blingy-est technologies. A Harvard Business Review study states:

…if you can prevent 5% of your customers from leaving you, you can increase your bottom line profit by 25 – 95%. 82% of lost clients goes somewhere else because of a customer service issue!

Keith Lee states:

So again, 82% of the customers who leave one business and go to another do so because of service related issues… and what’s really key and sad for you and me is that most of those customers don’t bother to complain. They just leave and don’t come back. And then you’re stuck spending a bunch of time and money trying to get new customers into your store, when with some consistent and persistent messages and training to both your team members and customers they would never have left in the first place.

Okay, so it’s likely that Mr. Lee is trying to sell us something, but his point is still valid.

We do want to feel good about the places where we spend our spacebucks. And companies who realize this will always have more business than those who don’t. Of course there are a few, “The game might be crooked but it’s the only one in town.” style industries, but home entertainment is not ONE of them.

Blockbuster does need to innovate and step up its game, but first it needs to remember their customers have choices. And in most cases folks are not eager to shell out large amounts of cash for marginal products and piss poor customer service.

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14 Comments leave one →
  1. March 25, 2010 2:40 pm

    Thank you! I’d also like to add that Blockbuster Inc. acquired and then ran the awesome Music Plus chain into the ground in a few short years. Same tune. Fancy machines where you can listen to CDs don’t mean a damn when you’ve got a bunch of underpaid, cranky clerks who don’t give a shit about music OR customers. Way to go, Blockbuster!

  2. March 25, 2010 2:41 pm

    Music Plus was so COOL. They were poised to give Virgin Megastore a run for its money, and Blockbuster made sure that didn’t happen. Assclowns!

  3. msjacks permalink
    March 25, 2010 2:51 pm

    I drove by a former Blockbuster in Memphis last week and the drop-off box was still there, even though the building is now a sub shop and has been for awhile now. I wonder how many people dropped stuff off there, only to be billed like you were.

    It’s pretty irritating that you were charged so much for all of that crap, especially considering that you can buy any of those movies for a dollar at a good thrift store.

  4. March 25, 2010 2:53 pm

    The most egregious was the Earthquake related one. Sorry, but it’s hard to get your videos back on time when FWYs have collapsed and you’re not sure if your home is going to be Red Tagged (deemed uninhabitable).

  5. March 25, 2010 3:05 pm

    Excellent business and personal perspective, snarky. I appreciate the link love, too.

    It’s truly sad about the shody Blockbuster treatment. There were actually similar shady events with New Orleans post-Katrina – we were still getting energy bills after leaving when, obviously, there wasn’t any power at the time!

    In some ways, I feel like Best Buy, Circuit City and Blockbuster are relics of the past, and one is trying to get to the future (http://industry.bnet.com/media/10005107/best-buy-spins-its-wheels-in-the-digital-movie-download-game), one has died off and one doesn’t know what to do with itself. It’ll be interesting to see how things shake out, though I don’t care on a personal level – I’m using Netflix Streaming and coping an iPad for my entertainment!

    -Damon

  6. araymondjohnson permalink*
    March 25, 2010 3:15 pm

    I seriously was looking at a Blockbuster store today across the street from where I was eating lunch and there was a sign that they were starting a going out of business sale, and I thought “in other news: as of last week, Blockbuster was still in business!”

    I’m so glad you called them out on their bullisht. No need to praise the dying if they don’t deserve it!!

  7. March 25, 2010 3:47 pm

    Damon, your stellar analysis really fueled this entry for me, particularly the article I linked. Many folks bury valid analysis under a pile of chow chow and yours was one of the first that bottom lined it for me. :)

    It’ll be interesting to see how things shake out, though I don’t care on a personal level – I’m using Netflix Streaming and coping an iPad for my entertainment!

    Ditto. I am in love with my boyfriend – NETFLIX INSTANT VIEW. I spend more time with him than I do with my real boyfriend.

  8. evmaroon permalink
    March 25, 2010 4:00 pm

    Great post! It’s fun to dance on their grave even before the last shovel of dirt is on the ground.
    I’ll tell you why I stopped shopping at Blockbuster: I worked there briefly when I was 18, and was appalled that I’d have to spend $40 on a shirt and trousers, but they’d fire me after I say I couldn’t work on the 4th of July because I’d already made plans before I got the job. I netted a loss on that job, and had nightmares about eternally shelving videos for weeks afterward.
    And I really didn’t like that they would Walmartize their inventory, refusing to carry movies that by today’s standards, are pretty tame, nor would they carry any GLBT titles. It’s the same reason I don’t eat Domino’s (in addition to the shit pizza they make).
    But moreover, isn’t this just a demise of the video rental industry in general? The technology for watching, storing, and renting movies is just too different than it was in the 1980s.

  9. March 25, 2010 4:02 pm

    Blockbuster waited too late to ditch its punitive fee schedule, ignored the rabid “classic release” crowd and in most cases houses craptacular and incomplete inventory as far as TV shows are concerned.

    My Blockbuster had seasons 1, 2 and 4 of Six Feet Under and seemed annoyed I had the cheek to wish to view all five seasons, and instead steered me towards their vastly inferior Netflix ripoff product.

    These companies need to master the new hotness of cultivating BRAND LOYALTY from their customers, and despite the schadenfreden-alicious take down of Circuit Shitty, they seem unmotivated to do so.

  10. March 25, 2010 4:09 pm

    And I really didn’t like that they would Walmartize their inventory, refusing to carry movies that by today’s standards, are pretty tame, nor would they carry any GLBT titles. It’s the same reason I don’t eat Domino’s (in addition to the shit pizza they make).

    In the summer of 2007 when I went on my “I MUST WATCH ALL OF NEWMAN’s AND REDFORD’s FILMS” – Blockbuster was still the only brick and mortar show in town – I was stunned to discover you could not find any of the classic films of these actors available in Blockbuster stores!

    Playa, they didn’t even have COOL HAND LUKE. It wasn’t all, “We had it but someone hotboxed it.” but it was a title they couldn’t be arsed to stock. And these aren’t actors known for starring in provocative or controversial films!

    I think there is a place for rental industry, but I believe niche marketing will work best. The one rental place I do frequent has the absolute BEST and most comprehensive selection of TV shows I’ve ever seen. If they carry a title, they carry every single season currently available on DVD and they are talking about moving toward a subscription model – similar to Netflicks – and they host Viewing events and Nerdfests and sell cupcakes.

    That said, cupcakes won’t help Blockbuster.

  11. badhedgehog permalink
    March 25, 2010 4:27 pm

    It all comes down to this: whether fucking off your existing customers in the vain hope of getting more new customers is a) a good idea or b) a bad idea. In the 90s it seems there was a big myth that new customers would be an eternal source of gravy most fragrant, and it just isn’t so.

    Any company that responds to “earthquake, house falling down” with a “fuck you” deserves to go to the wall.

  12. March 25, 2010 4:35 pm

    Seriously. My mom pretty much washed her hands of them immediately. I, however, was a little slower on the uptake.

  13. Kjen permalink
    April 17, 2010 9:49 pm

    Blockbuster seems to be trying to put themselves in the emergency rental category. They don’t have a stock of movies anymore. They’re pretty much just carrying newly released materials. As in they’re using the hype of new releases and relying on people impulsively deciding to stop by and rent their movies. It could work. Except for the fact that they keep increasing their prices and have gone back to that firm, due date, total drag.

  14. hsofia permalink
    April 17, 2010 10:55 pm

    I have gone to the Blockbuster shop near my house on four occasions over a 2 year period looking for movies that were from the 80s and 90s. In all four cases, they did not have the movies. In all four cases, the post-high-school jocks who were running the place were so busy shooting the breeze with each other and inappropriately flirting with the insecure female staff that I had to basically shoot flares out my butt to get their attention. At which point they were surly and useless and critical of my film choices. So after the 4th visit when I left shaking with anger – which is not how a cheerful plan to pick up “Enemy Mine” should end – I realized that I needed to put Blockbuster on my HELL NO list. Hollywood Video was a little further away but a lot better in terms of inventory and customer service, and if I needed to pick up something on emergency it was a better option.

    I have used Redbox a number of times but find I just get greedy and check out too many movies to watch in one day, then end up with a bunch of late fees. So I stick to Netflix.

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