Can Blockbuster Stand up to Netflix - Article Example

Can Blockbuster Stand up to Netflix?Business ModelThe business model followed by Blockbuster has changed significantly over the past years mainly as a response to changing technology and entertainment delivery systems. The business model for the company is simply to act as the middle man between movie studio and viewers by making sure that the latest released films are available for viewing in their rental locations spread throughout North America, South America, Europe and other parts of the world (Wikipedia, 2006).

The business model had been very successful in the past and profits for the company had been substantially high, but recent developments and competition from online stores has meant that the company has suffered huge losses in recent years (Epstein, 2006).CompetitionThese forces have mostly come from the competition provided by illegal downloads of movies in local markets and the pirated copies of films available in foreign markets but most importantly Blockbuster faces competition from a company called Netflix.

Instead of using local distribution channels, Netflix uses an online store front which means that they have reduced their distribution costs to a great extent. Netflix has used a technological solution to give itself the fist mover advantage forcing Blockbuster to play the catch-up game (Epstein, 2006).SolutionsAs the latest information available from Blockbuster, the company is venturing into online rentals for films and allowing the distribution of media material from online sources such as websites and even in-store kiosks to locate older films (Blockbuster, 2006).

However, this may be a case of too little too late since Netflix is already offering their clients the same services. Blockbuster tried to compete with Netflix on price but the running costs of having stores across America and the human resource cost of maintaining those stores means that Blockbuster will always find it difficult to compete solely on the price model.The FutureIt does not seem that Blockbuster has a good future since analysts from both the business world and the Hollywood entertainment industry consider it to be little more than a zombie about to be killed by modern distribution methods (Epstein, 2006).

However, Blockbuster does have an established name in the rental business and it is still a place where individuals can see the choices they have rather than to scroll through the choices. This certainly offers a better experience for the buyers but Blockbuster has to ensure that all locations which have remained unprofitable for the past few years are shut down and removed while the locations where continual profits are being made should be upgraded and improved.Works CitedEpstein, E. (2006).

Hollywood's New Zombie: The last days of Blockbuster. Retrieved December 14, 2006 from Slate.com website: http://www.slate.com/id/2133995/ Blockbuster. (2006). About Blockbuster. Retrieved December 14, 2006 from blockbuster.com website: http://www.blockbuster.com/corporate/aboutBlockbusterWikipedia. (2006). Blockbuster. Retrieved December 12, 2006 from wikipeida.org website: http://en.wikipedia.org/wiki/Blockbuster