Blockbuster CEO Is Still Confused By The Long Tail
from the have-you-taken-a-look-at-your-competitors? dept
In 2004, Chris Anderson wrote his feature article for Wired Magazine in which he coined the term "the long tail" to describe the business possibilities made possible by digital distribution. Four years and one best-selling book later, the CEO of Blockbuster is still confused by the concept that has been utilized by Netflix to wreak havoc on his business model. Yet, in a recent interview, the head of Blockbuster, Jim Reyes, misses the entire point of the long tail.In response to a question regarding the small catalog of Movielink, Blockbuster's digital download service, Reyes responded, "When was the last time you watched 10,000 movies, you know? I don't care how many movies are available to me. As my personal taste as a customer, I want to watch the new stuff so whether we have 10,000 movies or 200 movies it doesn't matter if I don't want to see any of the movies that we have." The point of the long tail is not to ignore the hits, but to make available more. While Reyes's quixotic opinion may appease viewers with very limited tastes, when distribution and content creation is exceedingly cheap, it makes no sense to limit content. In his original article on the concept, Anderson noted that one-fifth of Netflix rentals are outside the top 3,000 movies. Clearly, a sizable minority of movie-watchers want to see films outside Movielink's inventory that "is heavily weighted toward newer releases and mainstream staple titles."
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Filed Under: downloads, long tail, movies, rentals
Companies: blockbuster, movielink
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Egotistical CEO
Typical egotistical CEO, thinks his own personal tastes are paramount.
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Re: Egotistical CEO
Actually, most new movie suck anyways. If they're good enough to rent, I've probably already seen it at the theater; and therefore, no need to see it again.
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Re:
For the first time in years, I went to my local Blockbuster a few weeks ago. I asked for The Nightmare Before Christmas. The girl I talked to was visibly embarrassed when she found out that they didn't have it.
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My reason for renting
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digital means NO STOCKING
the trouble with physical media is the cost of failure.
it's stupid to press millions of discs of movie that bombed. it's stupid to truck those discs all over the country and it's stupid to waste shelf space on them. but a digital copy is a few hundred megs on a server somewhere. it can sit there forever for a nominal cost.
a warehouse with 10 copies of every movie, tv show, short film and music video ever made would be impossible build, run, stock, and search profitably.
a digital version is another story. you could house everything, from the first cave painting to the dark knight, to erotic fan fiction and serve it up profitably since people will pay you for the sheer convenience.
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Re: digital means NO STOCKING
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I want to thank Blockbuster...
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Re: I want to thank Blockbuster...
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Mr.Reyes, what YOU want to see doesn't matter.
My family usually gets together for a "movie evening" at least once a week. My brother has an over-300-movie Netflix queue and there's always something nobody's seen, and frequently no one's heard of.
The result has been some amazing surprises and the virtual extinction of theater visits for movies. To give but one example, Ang Lee's "The Wedding Banquet" astonished us all with both high and low comedy, along with a marvelously tender and heartwarming story. And that's only the most memorable of over two dozen non-latest-Hollycrud-blockbusters we've seen in the last few months.
If I want a (shudder) mainstream staple (like the abysmal Mummy 3), I can rent that at the local supermarket these days for a buck while I'm picking up the milk.
Viva Netflix!
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Blockbuster still doesn't get it...
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He understands perfectly well
Where I believe he's got it wrong is in believing his business model is superior to a long-tail based model such as Netflix. He is not confused; he thinks that Blockbuster can thrive without going deeper into catalogue, simply by providing a few conveniences that Netflix cannot offer, such as in-store substitution where you order online, receive the DVD's by mail, but then change your mind about what you want to watch.
He's taking a chance, and I don't agree with him, but it's a tactical decision to invest in things other than deepening his company's offerings at this stage. Not any failure to understand the long-tail theory.
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Re: He understands perfectly well
I agree. Reading the full quote from the article, my impression was that he understood the principle of the long tail, but that he just didn't agree that the strategy was worthwhile. Now, if he said that he was implementing the long tail by focusing on the top percent of new movies, that would demonstrate confusion over the term. But just because someone disagrees about the benefits of implementing a certain strategy, it doesn't mean they don't understand the strategy.
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new movies
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You have got to give some credit to Blockbuster
Of course, my local blockbuster shut down and I ended up switching to Netflix for the online movies (which are severely limited also). I am not very satisfied with Netflix which should be an indication to Blockbuster that they have an opportunity to strike again.
By the way, I would really be interested in a longer post from Techdirt on the Blockbuster/Netflix battle. I know I don't have all the facts and I think it presents an interesting economic case.
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Arrogant c***
That's it in a nutshell, the reason why this business is in so much so-called trouble. First, he assumes that his personal taste is what drives everyone, which is simply not the case. I'd rather rent a copy of the 1928 Nosferatu or 1982ś Blade Runner than sit through crap like the newest Paris Hilton movie that litters his stores' shelves. Don't give me that option? I'll go elsewhere.
I remember when Blockbuster first opened near me in the UK in the mid 90s. I spent a lot of time renting 70s Jackie Chan movies, 80s Dario Argento movies and low-rent action movies starring the likes of Jeff Speakman and Cynthia Rothrock. None of these movies would have made it on a top 200, yet every time I rented these, Blockbuster made money. the idea of the long tail is that if you spend, say, $10 buying a movie into stock and it's rented 6 times at $2 a pop, it's in profit. The long tail says that the profit point will come eventually whatever the movie might be.
This guy seems to be thinking 90s. Back then, concentrating on a couple of hundred recent movies made sense as Blockbuster's main draw was the fact that they had more availability of these movies than smaller stores. Nowadays, it means nothing. If I want to watch a movies and you don't have it, I'll go elsewhere. Even if the movie I want to watch is a 30 year old movie.
@sehlat: Hear, hear!
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Re: Arrogant c***
"Eventually". But is anyone surprised that a CEO is focused on short-term profits over profits that could be made "eventually"? Jim Reyes' quote does sound arrogant, but I get the impression that he believes enough of the Blockbuster customers are like him that he can make a quicker profit on the top movies and spend the money that would have otherwise gone to extend the digital catalog (to chase the long tail) on more profitable opportunities.
If you flip around the stat given in the original post, NetFlix makes 80% of its profit on just 3000 titles. Sure, we may like the more obsure movies, but if you're the CEO of blockbuster (who is beholden to stockholders and probably has big bonuses tied to the stock price) and see these kinds of stats, wouldn't you naturally start thinking of short-term profits?
(BTW, I'm not defending a focus on short term profits. I'm just saying that Reyes' stratety seems to come more as a result of this focus than on arrogance or a misunderstanding of the principle of the short tail.)
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Blockbuster isn't losing to Netflix because of their smaller collection...they're losing because Netflix developed the model first (and having executed it quite well), and blockbuster hasn't given Netflix users a reason to come back.
The next frontier is clearly online video streaming. Blockbuster needs to get out in front to gain some leverage. They aren't dead yet.
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Re:
The one option Blockbuster did have that made it worthwhile for a short time was the ability to trade in all your titles at the store. It meant I could get the 2-per-month plan and actually get 5 per month (trade in both movies and use the printable in-store coupon). It cost a little more than a single rental at the store. Alas, that turned out to be a heavily advertised, 90-day ploy to lure users from Netflix, then bait-and-switch by taking that option away or severely limiting it. After being treated like that, I will never use Blockbuster again.
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Its Blockbuster . . .
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confusion
I'm not defending Blockbuster, and as one person above noted, it would be interesting to actually post something comparing Netflix and Blockbuster in terms of where each stands today, how it is doing, and where it appears to be heading. But it does seem as if a lot of the people who comment here are not understanding that there's an apples-to-oranges aspect of the conversation here since Blockbuster is still very much based on a traditional brick-and-mortar model.
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just moved to netflix
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The company's called *BLOCKBUSTER*
Joe Fucktard wants to see : Joe Fucktard wants to see what Hollywood tells him to see.
I just don't give a damn about what the CEO of a company who's targeting morons and making it plain in their name has to say.
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Ten days = no movies
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no movies
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