In 2010, the well-known movie rental franchise chain Blockbuster filed for bankruptcy—a sad ending to an otherwise very successful venture that, at its peak, in 2004, had more than 9.000 stores around the world. Unfortunately, some bookstores will suffer the same fate. But which ones will they be?
Bookstores face inevitable challenges and changes in the years to come, including what is now known as the “Blockbuster Dilemma,” or what in business school they call a “disruptive dilemma.” If we take a step back and look at what happened to Blockbuster, we can understand the dilemma these stores must confront.
After having declined purchase by Netflix for $50 million in 2000, Blockbuster was confident in its expansion strategy and underlying business plan that they felt was invincible. But with the emergence of improved TV technology, it became not only possible, but easy, to get content directly to consumers’ TVs, making instant delivery of content the new norm. This made going to a brick-and-mortar store like Blockbuster to rent physical copies of movies seem like a waste of time.
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