A few different factors contributed to Blockbuster eventual demise. The debt was an especially big problem for Blockbuster, because launching its online subscription business was expensive. The idea was that Blockbuster would eventually add enough subscribers to make Total Access profitable.
Netflix faced similar obstacles, which is why the company took over six years to post its first profit and why it continues to burn through billions of dollars each year while adding new streaming content to grow its subscriber base. The other thing that got in the way of Blockbuster squashing Netflix was Wall Street billionaire and activist investor Carl Icahn. Icahn and the other board members he installed vehemently opposed Antioco's plans to build out Blockbuster's online business and, especially, the decision to ditch the company's lucrative late fees.
They didn't seem to grasp the importance of building a strong digital presence to the future of Blockbuster's industry. In the end, though, Blockbuster's ultimate demise might have come down to an argument between Antioco and Icahn over the CEO's bonus. Icahn and Keyes wanted Blockbuster to focus on growing its revenue to pay off its debt, which they believed meant turning the company's focus away from the online business and reinvesting in brick-and-mortar stores.
Under Keyes, the company even reinstated its unpopular late fees in Blockbuster's online subscription business sputtered and the company was suddenly faced with an even larger obstacle than Netflix: the financial crisis that led to the Great Recession.
The financial crisis made it a scary time to be carrying so much debt, especially since banks were no longer as willing to lend additional money. For his part, Keyes later blamed Blockbuster's ultimate demise on the company's inability to raise Wall Street financing to pay off its debt.
Randolph calls Icahn's activist push at Blockbuster something of a "deus ex machina" that rescued Netflix just as Blockbuster had "finally mounted a truly legitimate and sustainable challenge. Meanwhile, Icahn has called his activist role at Blockbuster "the worst investment I ever made" in his own Harvard Business Review essay , a rebuttal to Antioco's. The stock fell.
Activist investor Carl Icahn launched a distracting proxy fight. But as former Blockbuster executive Tom Casey explains, the financial crisis marked the beginning of the end. N and Target TGT.
N , which were selling ever-cheaper DVDs. It filed for bankruptcy a year later. Breakingviews Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Compare movie streaming services here. Try Blockbuster on Demand Now ». Ease of Use. Visit Blockbuster on Demand Now ». Customer Support. Plan 1 Tv Shows Offered Yes. Visit Site ». No intrusive pop up ads Good customer support Lots of info for each movie.
Difficult to navigate Pay per order. Bottom Line. Top 5. Compare Similar Products. Read Netflix Review ».
0コメント