The reign of Blockbuster could be coming to an end

Blockbuster is one of those businesses that has been greatly unable to find its place in the digital age. There was once a time when people would have memberships to the rental store and need to go to a store and rent something instead of using NetFlix and ordering it over the internet or running to a RedBox to get the newest releases on DVD.

Blockbuster, obviously, hasn’t been performing well and in a statement released yesterday says that the ailing movie rental company will be closing nearly 1,000 stores to help cut costs. This is double the amount that it originally intended to close from a prior statement.

So, other than the obvious, what’s wrong with Blockbuster? Well, in my opinion, the main weakness of this company is its lack of diversification. The lack of diversification in its product offerings has left it trailing the newcomers to the business and it has had to try and keep up. Blockbuster offers nothing except movie and video game rentals. Sure, you could go to the store to pick up a 20 ounce Coke and a bag of popcorn, but why?

Another problem is that time and time again, customers leave the store unhappy because the store never has the movie they were looking for in stock. I don’t know how many times I’ve walked into a Blockbuster and been disappointed when I went to pick up a copy of whatever New Release I wanted at the time only to find an entire wall of stock outs.

Then, DVD’s have gotten so inexpensive that it actually costs more to rent some movies than it does to buy the movie. As much as I don’t want to admit it, three years ago I was able to buy Austin Powers for $3.50 brand new from Wal-Mart (I know this because it is still in the shrink wrap and has a price tag on it). To rent it from Blockbuster would be closer to $5 after tax.