Maybe It’s Time to Start Hating Blockbuster Again

Remember back in the 1980s, when you wanted to watch a movie, you went to Mom and Pop’s Video Gallery by your local grocery store? You went into a cramped little shop and browsed through a collection of no more than a thousand VHS and Beta video tapes. The store was dimly lit and poorly organized. As you walked by the little room at the back of the store, you peered through the beaded curtain and tried not to let anyone catch you noticing all of the adult titles on the shelves. The little independent video store always stocked the new releases, but they never had more than three copies of any particular title. You just rented what they had, watched it that night, and brought it back before 7:00 the next evening. For years, that was the only option if you wanted to rent movies.

Eventually, Blockbuster came to town. The store was bright, clean, and spacious. They had thousands of titles on the shelves. They were well organized, and everything was easy to find. Best of all, they carried dozens of copies of the most popular new releases. At last, you could have it all, and it did not even cost much more than Mom and Pop’s Video Gallery.

As time went by, the customers of Mom and Pop’s Video Gallery started defecting to Blockbuster, and Mom and Pop started feeling the squeeze of a shrinking customer base and declining profits. Since Mom and Pop did not understand economics, they tried to make up for the reduction in revenue by charging their small loyal customer base more money. It worked in the short term, but the loyal customers eventually stopped coming. One day, you drove by Mom and Pop’s Video Gallery and saw a sign that read, “Closing Sale - All Movies 50% Off.” A month later, the store was closed.

It was then you noticed Blockbuster was the only place around to rent movies. It was okay, at first, because Blockbuster had everything, and the prices were reasonable. Things began to change, however. Blockbuster started raising prices and started getting very strict about polices. The counter clerks started getting more aggressive, apathetic, hostile, and dismissive. It was not long before you realized that Blockbuster was the only game in town, and you were at their mercy.

Things got bad, and they just kept going down hill. You turned in some movies late and got hit with some hefty late fees. A Blockbuster employee forgot to scan one of your returned movies, and you were forced to pay for it. One time, your friend returned your movie for you and accidentally returned it into the wrong Blockbuster. As a result, Blockbuster charged you a ridiculous amount of money for transferring the movie back to the correct store. It was then you realized you hated Blockbuster.

You were not alone in your hatred for Blockbuster. Millions of customers across the nation had shared your experiences, and the resentment began to build. One by one, customers began to swear off Blockbuster forever. Some disgruntled customers started driving across town to one of the few remaining independent video rental stores, others starting just buying movies, some began returning to the theaters, others began subscribing to pay-per-view and premium cable channels. The vanishing customers, hurt Blockbuster, but Blockbuster’s market share was so tremendous, the company found it easy to make up for lost revenue by increasing fees on its remaining customer base.

The big change finally came in late 1990s. The newly created DVD-by-mail industry finally gave movie fans access to more movies, for less money, with more convenience, and fewer headaches. It took a few years, but Blockbuster began to feel the pain as DVD-by-mail companies began to spring up and chew away at Blockbuster’s once overwhelming share of the video rental market.

Perhaps the threat of obsolescence caused Blockbuster to have a change of heart, because the company suddenly started being nice again. Blockbuster store clerks started being friendly, helpful, and understanding once again. In 2004, Blockbuster launched their own DVD-by-mail service: Blockbuster Online. They eventually allowed online customers to exchange their online rentals for free in-store rentals. The company ended late fees. Blockbuster offered an excellent value, and customer service was pleasant. In short, Blockbuster was a pleasant place to rent movies, and people started realizing they did not hate Blockbuster anymore. Blockbuster basked in the goodwill of its customers for a while, but they must have realized happy customers are not necessarily profitable customers, because Blockbuster gradually began to return to its nasty ways.

With little or no warning, Blockbuster began hiking prices for existing online subscribers, reducing or eliminating in-store rental coupons, limiting in-store exchanges, etc. Blockbuster’s online (email-based) customer service has become an abysmal disgrace. Blockbuster keeps changing pricing structures and policies. Title selections in the stores have been shrinking for much of 2008. Availability of titles online has become a farce, and Blockbuster Online’s bafflingly bizarre shipping policies are placing considerable limits on subscription benefits. Most recently, Blockbuster reneged on their pledge to end late fees. Soon, we will probably see the Blockbuster store counter clerks once again become aggressive, rude, and rigid toward customers.

The root of all of this bad behavior is money. Blockbuster is a publicly traded business, and they are obligated to generate profits for shareholders. Unfortunately, Blockbuster has not managed to find a way to be profitable while keeping their customers happy. Blockbuster is obligated to pursue profit, but its customers are not obligated to supply that profit while tolerating the company’s disregard.

We used to hate Blockbuster, but they managed to be nice just long enough for us to stop hating them. Now, things are changing, and Blockbuster is beginning to show a renewed disdain for its customers. It’s not too late to get those feelings back. Maybe it’s time to start hating Blockbuster again.