When you think about some of the major brands that have gone under or have been neutered in just the past few years, it’s mind-boggling.
Newsweek, Kodak, Border’s, FAO Schwarz, Hostess, and so many others have been replaced, bounced, or otherwise disrupted out of business.
The latest victim – but one that’s been coming for a long time now – is Blockbuster.
And with that, the end of an era. Millions of people remember those “Blockbuster Nights,” trolling around one of their massive stores, finding just the right movie to kill a couple of hours with friends and family.
But better technology and a mediocre customer experience has rendered Blockbuster irrelevant. While they quickly made the switch from videocassettes to DVDs, Blockbuster never made the bigger adjustments necessary to stay in the game. They didn’t really “get” Netflix and Redbox, and consumers complained about late fees, unclear policies, and other clunky rules that made video rentals cumbersome and expensive.
Netflix, on the other hand, has moved from rentals through the mail, to streaming video, and content creation with hit series like House of Cards and now Orange is the New Black. And in the process, they’ve begun to alter the nature of how TV series are released and distributed. While many of us still wait until Sunday night to watch the next episode of Homeland on Showtime, Netflix subscribers can access their series all at once, allowing consumers to watch them like reading the chapters of a book. When you run across a show you like, you can “binge view” an entire series.
Clever, innovative, buzzworthy, and breakthrough. All qualities that legacy brands have to exude to stay in the game.
The demise of Blockbuster, as well as some of these other mega names from the past, also says something about the limitation of relying on distribution for survival. It speaks to why most companies can’t make endless profits on their delivery systems alone. In Blockbuster’s case, they had 9,000 stores worldwide during their heyday. So it was never about finding a store.
What might have happened had Blockbuster started to create its own movie content – films, mini-series, review shows, and other programming you just couldn’t get anywhere else? That’s part of the Netflix plan, and now other media outlets are getting the message. More cable channels are producing series and shows, and now even Hulu has gotten into the act with a new series, The Wrong Mans.
And isn’t that precisely the challenge in radio, a business with a seamless, clean, and free distribution system? In an ever-expanding universe of delivery platforms, radio still stands alone with a convenient, simple way for content to be consumed on devices that are still fairly ubiquitous.
But the radio reality – like Blockbuster – is that distribution alone won’t keep the medium strong and healthy. Content has to be stellar, proprietary, unique, and compelling. While the radio industry works harder to provide its programming on streams, apps, and now “center stacks,” the central question – “Why radio?” – continues to loom for many stations.
What is it about what’s on your air, on your website, on your mobile app, and in your on-demand offerings that people living in your hometown just can’t get anywhere else?
It is no longer about besting the station down Radio Road. It is about understanding that the content universe has expanded and that radio now competes with everybody.
So say good-bye to Blockbuster – another victim of the times. Every legacy brand and business is being tested by the forces of disruption, including tech companies like BlackBerry.
It is essential that radio passes the test.
P.S. So if you rented a movie on Blockbuster’s last day, do you still have to return it?
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,300 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.
Fred was inducted into the Radio Hall of Fame in 2018.
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“It is no longer about besting the station down Radio Road. It is about understanding that the content universe has expanded and that radio now competes with everybody.” Great quote (I’m going to take credit for it by next week). Content has always been king. We got lazy and rested on our laurels (like Blockbuster). Are we too late to the party? I don’t think so…then again, I liked Zima.
Thanks for the response, Jim. You’d hope that legacy businesses would take a moment to reflect every time a Blockbuster or other legacy brand goes under. There are always lessons to be learned if we’re open to hearing them.
we just experienced our first “binge viewing” time this weekend with Homeland on Showtime. Easy to do when you get hooked into a show or event!
A big change in time-shifting and consumer consumption! Great read.
DP
Funny – my wife and I watched the first two seasons of “Homeland” the same way. And then we moved onto “Game of Thrones!” Thanks, Dave.
Today’s blog is probably the best framing of radio’s big challenge I’ve seen yet. It seems so obvious now – Bolckbuster could have leveraged their brand equity into kiosks and streaming and successfully pre-empted Redbox and Netflix. My guess is that the people making those decisions at Blockbuster were technologically challenged and missed the trend – and the toasting of Blockbuster only took a couple of years.
But I think its going to be harder for radio than it would have been for Blockbuster.
TV in the broadest sense competes more easily with Netflix than radio can with its online competition. There are hundreds of cable channels that compliment the major networks – they’re co-owned, they co-promote and can be very stratified in what they offer. Comcast has built a complete vertical and can augment that with their own VOD or original programming if they want.
The number of radio signals is much more limited than the number of TV channels. Yes, radio can create more options them online, but that’s a money pit under current royalty rates and there is virtually no real movement afoot that could change that meaningfully. Imagine if TV was limited to local broadcast and lost money on every cable station. That’s the challenge that radio faces.
Some tough love here:
I don’t think radio’s leaders and decision makers are, by and large, up to surmounting those obstacles. Their public proclamations and actions don’t suggest that they even understand the problem, much less any true solution. The music industry (from whom they need MAJOR concessions to facilitate making money online) are some tough folks – they play hard and are used to getting their way.
Meanwhile, radio is fighting lawsuits from their monopoly ratings provider who are dragging them into court not for using their unsubscribed to data, but for merely seeing it – despite the fact that a lot of what they’re being sued about was in the media for anyone to see. This isn’t level fighting field – pick your analogy – fish in a shark tank or butter spreaders in a gunfight.
Bottom line: Radio doesn’t have (1) a strategy to prevail in the connected car,(2) a way to monetize it if they did, or (3) the firepower to negotiate it if they had numbers 1 and 2 worked out. And it doesn’t help that the Wall Street analysts (who IMO get way too much deference from radio) are pounding radio to cut costs to maximize the next quarter rather than suggest a more balanced approach that would ensure future quarters and years.
This column used to frequently ask, “Whats’ the digital application?” “What’s the connected car strategy” probably needs to be added to the question list.
Thanks for the analysis, Bob. Of all the obstacles you list, I think it’s the Wall Street manacles that strikes me as the most difficult to overcome. You see some small, privately held broadcasters doing some very progressive things, but it is clearly more challenging when dealing with analysts who don’t understand what radio operators are truly up against. In speaking with an associate in radio the other day about our DASH conference, I remarked that if we had a board of directors, we would not have been allowed to do this event – too much risk, we had never done one before, you can’t hold it in Detroit – you get it, lots of potential obstacles to success.
The upside of risk – especially in this environment – is even greater reward. I don’t have the answers but I may have to make new WTCCS wristbands to match those old green ones.
Thanks for the passion and for taking the time to add to this conversation.
Radio is populated with the wrong people to create or even facilitate that forward thinking vision, the fact that you are even talking about this Fred makes this sad fact a reality. It begins at the monetization level. The decision makers continue to pull all the wrong levers and push out of date buttons. We’ve become a fourth and one punt industry, we need risk takers who are willing to go for it because they’ve assembled a wild and crazy talented team that can get the freaking two yards every time.
Continuing the analogy, Jon, you have to throw the ball down the field. And the tough challenge is that for public companies with judgmental boards of directors, this is probably a very difficult challenge for a lot of companies. I had not heard the expression “a 4th and 1 punt industry” – I like that. We have to start going for it. Thanks for taking the time.
So why isn’t there a Steve Jobs of the radio world, who just rethinks and reinvents the commercial universe? Have all those entrepreneurs just skipped over the idea of ‘radio’ and ended up with cyber toys like Twitter and Facebook? Maybe, as pointed out on another threat, attention span is down, etc. Wall Street might be the issue but, it didn’t stop others in the past.