The Cost of Protecting Existing Success
At its peak, Blockbuster operated more than 9,000 stores worldwide and generated billions in annual revenue. Its retail model dominated the home video rental industry, with physical locations, immediate availability, and late-fee revenue forming the foundation of its business. Around the same time, Netflix introduced a DVD-by-mail subscription model that initially appeared limited compared to Blockbuster's extensive retail presence. Although Blockbuster eventually launched its own online service, it struggled to shift away from the business model that had made it successful. As consumer preferences evolved toward convenience and digital delivery, Blockbuster's existing strengths became increasingly difficult to separate from its future strategy. The company filed for bankruptcy in 2010.