Friday, September 24, 2010

The Long Tail Is Connected To The Big Dog

With yesterday's announcement of Blockbuster filing for Chapter 11 bankruptcy, we pass yet another milestone in the disruptive path from the world of before the Internet to our modern online world. And while Blockbuster's announcement isn't much of a surprise -- travel through any neighborhood strip mall and you can find an empty shell of a store that once was a Blockbuster or a Hollywood Video -- it still stands a noteworthy milestone.

The subtitle of this whole story might be "the one-time big dog of the video rental industry was brought down by the Long Tail." Or maybe a variation on Clint Eastwood's line from A Fistful of Dollars, "the Long Tail on the one side, a vending machine on the other, and Blockbuster in the middle." Of course, it didn't work out for Blockbuster like it did for Clint.

You can look at the fall of Blockbuster from a variety of angles. From a customer experience marketing perspective, I like to reflect on all of those times when Blockbuster took an arrogant, self-serving approach to customer service. Many of their worst customer service issues could be rolled up into one phrase, "late fees." If there were no late fees, there might not have been a Netflix. Late fees inspired Netflix and served as a key differentiator early on. Think about the number of those angry, frustrated Blockbuster customers, just growing over time. In the end, did they have any passionate brand champions?

For me, the other interesting take-away is the traditional media versus the Internet. Whether it's retail, movies and music stores, or traditional media, so many of the businesses have built revenue models based entirely around content delivery. The Internet has changed that and is continuing to change that. Successful businesses have this integrated into their framework. Traditional businesses that innovate around this notion continue to thrive. What's comic is watching some of these companies and businesses that try to dig in their heels, build bigger walls, and hold back the oncoming wave.

Early this year, one of the major studios signed a deal with Netflix and Redbox to delay the availability of their new release movies for 30 days. The idea was that, during that 30 days, more people might buy new release DVDs. Blockbuster was exempted from the limitation.

Speaking for myself, I did not buy a single new release DVD or Blue-ray disc (not a significant change in my buying behavior). I also didn't make an effort to find a Blockbuster to rent a newer release movie -- I simply didn't care. My Long Tail of content is much broader than they see. Whether it's blogs on the Internet, 400 channels on the cable television, video games, or simple quiet time, I have so many more options for my attention that I simply don't care about most movies as content. As content, they haven't done anything exceptional to win my attention recently. Meanwhile, their content deliver business continues to search for ways to further confound and frustrate me.

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