A Cautionary Nonfiction Tale
Blockbuster has failed. Since 2009, Blockbuster closed over 80% of US retail store locations. On September 23, 2010, Blockbuster filed for bankruptcy before ultimately being purchased by Dish Network at auction in 2011. Many business analysts attribute an archaic business model to the company’s downfall. While that was part of the reason, there is more to the story. I happened to be working at Blockbuster at a pivotal juncture in 2007-08, and my experience tells an inside story about the fall of the video rental giant.
Blockbuster severely mismanaged the battle against the up and coming Netflix entertainment provider. At the time, Netflix rose ever higher in popularity through its flat rate DVD by mail service, as their on demand internet streaming media library was smaller, more expensive, and less available than it is now with integration with video game consoles and widespread faster internet speeds. In my region, the big push to compete came with Blockbuster’s unlimited DVD by mail and in store exchange service, which admittedly sounded like a deal worth doing. All employees at the store had to offer the service and were all excessively pushed into upselling higher numbers. However, no employee at the store ever saw any sort of reward for their efforts -including myself who consistently led the region. The practice of upselling quickly went into decay.
Blockbuster mismanaged its employees even further and left costumers angry. Every time an employee had to clock in or out it had to be during the exact minute it which it was scheduled. During an employee’s lunch, the worker had to clock back in during the 30th minute, not one minute before or after. A ten minute break forced the same process. The computer on which we did all this required the manager’s key to access. Furthermore, we were severely understaffed. A busy Friday night would have a line perpetually 10-20 customers long with only two employees at the registers to process the line, upsell products, register costumers, answer phones, and restock shelves. The lack of stocked shelves and our inability to get through the line and having to holding a simultaneous conversation on the phone with other irritated people often left costumers livid. Problems like (easily preventable) identity theft and our “restocking fee” as a part of Blockbuster’s “no late fees” campaign also left members fuming and took up too much time. Our constantly being understaffed also meant that we had no time to organize the shelves even though we knew they were in disarray.
Blockbuster upper management lacked common business sense to the detriment of the company. Due to their decision making, when a customer came to us with a scratched or otherwise defective disc, we were forced to restock it for another customer to complain about the same thing the next day. It is far underestimated how many Blockbuster members left due to the frequency of malfunctioning discs. In addition, when we had to downsize a formerly new release to just another title on the shelf the practice included destroying the majority of the discs in order to drive up the price when selling used ones. Instead of receive tax breaks for donating the DVDs or games to troops overseas in Iraq or to children’s hospitals, Blockbuster’s practice mutilated and discarded them in the garbage.
People usually like to attribute Blockbuster’s fall to Netflix’s success, but that perspective is incomplete. Having had the inside the track on the eve of their financial meltdown, I saw mismanagement at every opportunity. During the entirety of my employment, I did not see upper management once. Directly thereafter, I found myself working in a successful movie theater.
Leather Wing Media 