Why didn’t Blockbuster start a video streaming service?

The late 90s were a difficult time for Blockbuster to compete with rental kiosks like Red Box and Netflix. These services had the advantage of being able to stream movies to customers for a low price. It wasn’t until 2009 that Blockbuster attempted to create their video streaming service, but without success. Another issue that prevented Blockbuster’s success with video streaming is the fact that they didn’t have an ownership stake in Redbox or Netflix which could have allowed them to explore different ventures.

Blockbuster had the opportunity to be ahead of Netflix in the video streaming game when they acquired Movielink.  The company that owned it wanted to close down its operations and saw Blockbuster as a perfect fit. But Blockbuster was not interested in really investing in this enterprise, and only used it for licensing content for their DVD business.

In the late 1990s, when Netflix was founded, video stores were a commonplace sight in many neighborhoods across America. The idea of watching movies from the comfort of your home was still a relatively new concept, and DVDs had yet to be introduced. That all changed in 1999 when Netflix launched its online DVD rental service. However, by 2004, Blockbuster had already made several failed attempts to create its video streaming service; it did not pursue the idea again.

Why didn't Blockbuster start a video streaming service?

Walking away from the deal of the century (Blockbuster failed to start a video streaming service)

It was announced today that Netflix will not be partnering up with Blockbuster to create a video streaming service. The deal of the century would have given Blockbuster an edge in the digital video market, but instead, they walked away. “Blockbuster has mutually agreed to terminate discussions with Netflix regarding the potential opportunity,” said J.B. Park, Blockbuster’s president, and CEO in an email statement.

In the late 1990s, Blockbuster tried to launch a video streaming service as a response to the rise of Netflix, but they backed out less than a year later. With the rise of Hulu and Amazon Prime Video, it is no surprise that Blockbuster has been unable to stay afloat. In 1999, Blockbuster’s business model was driven by brick-and-mortar locations and mail-order rentals.

An inability to pivot quickly (Blockbuster failed to start a video streaming service)

Blockbuster, once a video rental giant in the 1990s, was unable to start a successful video streaming service. The company’s inability to pivot quickly led to bankruptcy in 2013. As Netflix and Hulu started to boom, Blockbuster failed to catch on with consumers who were looking for quick access to new releases.
The once-popular Blockbuster company found themselves unable to compete with Netflix and Hulu in the home media streaming market after they filed for bankruptcy in 2013.

Blockbuster failed to start a video streaming service because they were unable to pivot quickly enough. Blockbuster had been using their stores as a place of discovery, but with the rise of Netflix, people started going online for their entertainment, and brick-and-mortar stores no longer served as a destination. In 2013, Blockbuster partnered with Dish Network to offer both rentals and on-demand streaming services through the company’s satellite receivers, but by then it was too late.

Poor execution (Blockbuster failed to start a video streaming service)

Blockbuster’s new video streaming service, which is set to launch on Wednesday, has had a rocky start. The company has been unable to secure deals with major content providers, including HBO and Showtime; their executives have not yet announced if they will be releasing the service without these providers. This is not the first time that Blockbuster has attempted to launch an online streaming service; the company announced one in 2005 but was not able to sign any deals and never released it.

In the end, Blockbuster failed to compete with Netflix and Hulu in the video streaming service business, but that’s not to say they didn’t try. In 2011, Blockbuster tried to get into the streaming business with a service called Total Access. It offered users a chance to purchase several movies for a set monthly price, but it was an overly complicated model and customers were concerned about how much data would be used while browsing through their catalog.


Inability to compete with larger rivals (Blockbuster failed to start a video streaming service)

In the face of competition from giants such as Netflix and Amazon, Blockbuster could not compete in the video streaming market. After a year-long attempt to start a streaming service, they decided to close their doors in 2013 after massive losses. To compete with these larger competitors, Blockbuster needed to make decisions that were out of character for the company. Streaming services require much more capital to get off the ground than brick-and-mortar stores do.

Netflix and Amazon Prime have been dominating the streaming video industry for years now, but the latest company to try their hands at it is none other than Blockbuster. The company has announced its launch of a new video streaming service, Blockbuster Now, which will be available for purchase by late summer. It will be a complete entertainment package with movies, TV shows, and video games. With a monthly membership costing $8.

Blockbuster is reported to have failed at starting a video streaming service. Company officials are claiming that the company was unable to compete with larger rivals like Netflix and Hulu, both of which offer large catalogs of movies and TV shows for monthly subscription fees.
Blockbuster failed at starting a video streaming service, citing an inability to compete with competitors like Netflix and Hulu.

A flawed business model (Blockbuster failed to start a video streaming service)

In 2014, Blockbuster started a service to stream videos to customers. This service was acquired by Dish in 2015 for $600 million and closed in January 2016. The reason for this closure is due to the company’s lack of a consistent business model. To take on Stream TV, a streaming service from Verizon, they would have had to take on the burden of building out its network of Wi-Fi hotspots.

Blockbuster failed to compete with Netflix and Hulu. The company’s strategy was based on a flawed belief that the video-streaming market is a winner-take-all market, but this is not the case. A recent study found that subscribers to any one of the three providers represent less than 20% of U.

Activist investors with the wrong vision (Blockbuster failed to start a video streaming service)

Since 2006, Blockbuster has fallen from the pinnacle of the video rental industry to bankruptcy. The company hasn’t turned a profit in quite some time. Recently, though, an announcement came that they plan to compete with Netflix and other streaming sites by launching their service. This is yet another attempt by Blockbuster to re-establish itself as a competitor without success. This idea has been floated since 2011 but it’s unlikely to come to fruition anytime soon.

In March of 2019, Blockbuster announced that they will be launching a new streaming service, “BlockbusterNow,” that includes both subscription and transactional streaming services. However, as it is an all-too-familiar story in the technology industry, this idea won’t work as there are already too many other video streaming services.

A heavy debt burden (Blockbuster failed to start a video streaming service)

Blockbuster was one of the original video rental chains in the United States, but by 2013 they filed for bankruptcy and closed all their stores. The company continued to exist as a streaming service until this year when it abruptly shut down and announced that it would no longer be available for subscriptions.
The reasons for the sudden shutdown were unclear: some say that Netflix’s recent acquisition of Hulu contributed to Blockbuster’s decision to give up on its streaming service.

Blockbuster failed to launch a video streaming service because of its heavy debt burden. Blockbuster’s foray into the video streaming industry began with its purchase of Movielink in 2007. Blockbuster had $1.4 billion in revenue that year and a net income of $19 million, but this acquisition was not successful and it led to a bankruptcy filing two years later.


In conclusion, Blockbuster’s decision not to create a video streaming service likely stems from the company’s desire to provide an all-around entertainment experience. To this day, Blockbuster continues to offer movie rentals, games, and music downloads, making it a one-stop shop for all things entertainment. With Netflix now offering video streaming as well as DVDs by mail, Blockbuster has been forced to rethink its strategy and find ways to remain competitive in such an oversaturated market.


Resource 01: https://www.businessinsider.com/the-rise-and-fall-of-blockbuster-video-streaming-2020-1

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