Years before there was Apple Inc.’s (NASDAQ: AAPL) Apple TV or Netflix Inc. (NASDAQ: NFLX), there was Blockbuster, one of the largest retailers in America and the primary distribution channel for premium content. Blockbuster had over 8,000 stores, which rented out first video tapes and then DVDs. When Netflix flanked Blockbuster in DVD-by-mail service, Blockbuster chased it, but too late. It was tardy into streaming video as well. However, the fact that Blockbuster still exists at all is a testament to the strength of brands and how hard they are to kill.
Blockbuster was started in 1985. By 2011, it had gone through bankruptcy and substantial store closings. Dish Network (NASDAQ: DISH) bought it for $233 million. The reason for the purchase of the nearly-dead company was a mystery. Why would a huge satellite TV provider with tens of millions of subscribers want Blockbuster? Maybe as a hedge against the rise of Netflix and other streaming services. If this was the reason, Dish has not nurtured it. As a matter of fact, in 2014, Dish announced it would close the last 300 stores Blockbuster had — and its DVD-by-mail operation. It kept open its streaming premium service, which it called BlockBusterNow. Its library of video content is no larger than those of any of its largest competitors. Under Dish, it would not be surprising if Blockbuster is shut down completely.
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BlockBuster can join a handful of other dying brands that were important and powerful two or three decades ago. Each went astray with a business model not suited for its industry. In the car business, that would include Pontiac and Hummer, and in retail, Radio Shack (NYSE: RSH), a first cousin of Blockbuster. J.C. Penney (NYSE: JCP) is in the middle stages of fading. So is probably Best Buy (NYSE: BBY). There is a common thread with the retailers on the list. They have been undermined by e-commerce.
However, people still drive Pontiac cars, a brand that is a century old. Pontiac still has a website. GM (NYSE: GM), which shut it down, continues to offer service and promote its other brands at the Pontiac site. And there will be Pontiac cars on the roads for decades. Many were sturdy and can log hundreds of thousands of miles
Blockbuster is still in business, an improbable situation. That means for some set of consumers, its name still means something.
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