Netflix and the Internet is killing Blockbuster

Submitted by acohill on Wed, 09/16/2009 - 07:52

As I predicted many years ago, the video store is on the way out. Blockbuster has just announced it is closing more than 900 stores. Netflix and video on demand over the Internet has taken its toll. Blockbuster has added a Netflix-style ordering system with the supposed advantage of being able to drop movies off at the local store, but that's just a dumb idea that was always dead on arrival. Netflix has a superior service, and even though the quality of video on demand via the Internet is lower than watching a DVD, we're all adjusting our expectations downward because of the convenience of on demand viewing.

More and more TV is being watched in small, low resolution windows on computers rather than via cable and satellite, and no one seems to mind. Blockbuster says they are going to switch to kiosks of DVDs in many different kinds of stores (e.g. supermarkets, quick stops, etc.). Yea, that will make a big difference. The kiosk model may prop them up for a couple of years, but eventually, DVDs will go the way of the CD--the iTunes Store is now the biggest seller of music in the world.

Long term, bandwidth is going to become a big issue for on-demand services, and communities with high performance open access broadband networks will be far ahead of regions still limping along with Internet access via copper (DSL and cable).