Blockbuster Blames 'Piracy' Rather Than Bad Strategy For Bankruptcy In Portugal

from the gotta-blame-someone dept

Thu, Feb 11th 2010 4:51am — Mike Masnick

paperbag was the first of a whole bunch of you to send in the news of Blockbuster declaring bankruptcy in Portugal and claiming that it's all the fault of those darn kids and their downloading. Well, more specifically, it blames the government for not doing enough to stop the sun from rising every morning... I mean, from stopping people from engaging in unauthorized file trading online. This is just an excuse for a company that failed to execute. The number of folks accessing unauthorized movies online is still a blip, and almost certainly had little impact on Blockbuster's bottom line. The simple fact is that Blockbuster, worldwide, has done a really poor job of adapting to a changing world.

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Filed Under: movies, portugal, rentals
Companies: blockbuster

59 Comments

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Call me Al, 11 Feb 2010 @ 5:03am

I always objected to renting from Blockbuster in the first place. I just felt they were really over priced. In the UK you would rent a dvd for £3 but that same DVD would often cost less then £10 to buy. Its just not worth the money.
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- PaulT (profile), 11 Feb 2010 @ 5:46am
  
  Re:
  I stopped renting movies from Blockbuster a long, long time ago. You can wait 3-4 months and the DVD often drops below £7 to buy. Used DVDs are extremely cheap, and most supermarkets have regular cheap DVDs and HMV always seems to have a sale on, with DVDs to buy for £3. Unless you want a specific title *now*, there no reason to use them.
  
  If you want a lot of movies to rent, Lovefilm, et al. offer a decent service, although the streaming options aren't up there with Netflix for range and convenience yet.
  
  There's a lot of problems for Blockbuster that have nothing to do with "omg piracy". Hell, their entire business was built on running smaller players out of the market by buying ridiculous levels of stock and offering them at a premium for convenience. All it would ever take to run them out of business would be for someone else to offer that convenience for less, and that's been happening for years now.
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  - Richard (profile), 11 Feb 2010 @ 6:19am
    
    Re: Re:
    Having them for rent forces you to take them back and so keeps the house tidy.
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  - wvhillbilly (profile), 11 Feb 2010 @ 7:38pm
    
    Blockbuster busted
    Apparently Blockbuster didn't know how to deal with competition. In the USA we have such rental options as Red Box where you can rent a DVD for a dollar a day, or Netflix, which for a flat rate will rent you as many DVDs in a month as you want. You just can't charge triple to quadruple what others are charging and expect the world to beat a path to your door.
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Anonymous Coward, 11 Feb 2010 @ 5:07am

netflix is what was tore blockbuster a new one, not dl'ing. The market was there and they just didnt change fast enough
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- a different AC, 11 Feb 2010 @ 6:45am
  
  Re:
  I'm going to have to echo that sentiment. I haven't rented a movie from a brick and mortar store since i got netflix. The steady stream of movies keeps my busy. The bonus of netflix is that while blockbuster can only really keep movies on the shelf that are in demand, netflix can make almost any movie on DVD available to the customer. The only thing blockbuster can provide is immediate access to newly released titles, but new movies on netflix are only on a wait status for a week or so.
  [ link to this | view in chronology ]
- Marcel de Jong (profile), 11 Feb 2010 @ 6:46am
  
  Re:
  Except there is no Netflix in Portugal.
  [ link to this | view in chronology ]
  - Anonymous Coward, 11 Feb 2010 @ 7:22am
    
    Re: Re:
    Except there is no Netflix in Portugal.
    
    Well shoot, that sounds like opportunity's knocking for some intrepid Portugese!
    [ link to this | view in chronology ]
  - Hephaestus (profile), 11 Feb 2010 @ 7:31am
    
    Re: Re:
    There is also no Redbox video rental ... there is how ever a Red Box Virtual Office Services.
    
    Little Pink Box is available as a name ... please place your disc in the slot below .... Big Ole Grin
    [ link to this | view in chronology ]
P.Jacob (profile), 11 Feb 2010 @ 5:08am

Lame excuse, yes, but I think there's more to it
You see, I believe this is all PR from blockbuster. They got a LOT of coverage by saying that. If they had said the truth no paper would print it. And the truth is they just want to move to the Blockbuster On Demand service because of the very good choice of ADSL and cable around the areas of Portugal where Blockbuster operates. 4MB ADSL/cable is the minimum you would get. Many households are now accessing the internet with a 100MB connection.
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The Anti-Mike (profile), 11 Feb 2010 @ 5:11am

The number of folks accessing unauthorized movies online is still a blip

So wait, are you saying that there is almost no downloading of movies online?

Excuse me while I try to stop laughing.
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- IronMask (profile), 11 Feb 2010 @ 5:52am
  
  Re:
  Just have to say something don't you, no matter how retarded it is. A blip is an inconsequential amount. An amount that can be percieved to have little or no effect on the outcome or result. How do you conclude that what was written in the article inferred a blip to mean "almost no downloading of movies online"? Don't put stupid words into people mouths.
  [ link to this | view in chronology ]
- Hulser (profile), 11 Feb 2010 @ 6:11am
  
  Re:
  So wait, are you saying that there is almost no downloading of movies online?
  
  In a way, I respect that you present an opposing viewpoint to the TechDirt comments, but I have to agree with IronMask on this one. How you can go from "blip" to "almost no downloading of movies" is beyond me. It's either a fundamental misunderstanding of the term "blip" or an intentional misreading.
  [ link to this | view in chronology ]
- lux (profile), 11 Feb 2010 @ 7:48am
  
  Re:
  I also find that statement hard to defend. Regardless of industry profits as of late, online movie sharing is still rampant - maybe not in the US as much - but Japan, Eastern Europe.
  [ link to this | view in chronology ]
  - Hulser (profile), 11 Feb 2010 @ 8:20am
    
    Re: Re:
    "Rampant" and "blip" are not mutually exclusive. You can have a very large number of illegal movie downloads ("rampant"), but they can still be a relatively small part of the entire movie industry and its sales ("blip"). You may disagree on the size of the impact of illegal downloads, but taken at face value, the original statement is consistant.
    [ link to this | view in chronology ]
    - The Anti-Mike (profile), 11 Feb 2010 @ 8:24am
      
      Re: Re: Re:
      blip is used when you are trying to downplay something, and make it a non-issue, as Mike did here.
      
      In other posts, he would point out that file sharing is rampant, and that the entertainment industry better get on the bus.
      
      You see how it works? That's why I question most of what Mike posts, because he tells the truth, just tells it slant.
      [ link to this | view in chronology ]
      - The Anti-Mike is a moron., 11 Feb 2010 @ 8:46am
        
        Re: Re: Re: Re:
        Go back to drying water you fucking gimmick.
        [ link to this | view in chronology ]
        
        The Anti-Mike (profile), 11 Feb 2010 @ 9:15am
        
        Re: Re: Re: Re: Re:
        get your own name, loser.
        [ link to this | view in chronology ]
        
        Anonymous Coward, 11 Feb 2010 @ 9:22am
        
        Re: Re: Re: Re: Re: Re:
        says the loser who did the exact same thing
        [ link to this | view in chronology ]
      - Hulser (profile), 11 Feb 2010 @ 9:51am
        
        Re: Re: Re: Re:
        The blip that Mike referred to is the total effect of illegal movie downloads on Blockbuster business. I think this is accurate because the large majority of movies that a person downloaded illegally would not have been rented, from Blockbuster, Netflix, or anyone else. So, while illegal downloading of movies may indeed be "rampant", the issues facing Blockbuster that caused the most problems -- Redbox, Netflix, etc. -- overshadowed the effect of illegal downloading.
        
        Again, I don't see any inconsistancy or evidence of bias here.
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- Forge, 11 Feb 2010 @ 7:51am
  
  Re:
  Your lack of comprehension does not invalidate the poster's points.
  
  There is lots of downloading online. That's not in contest.
  
  The ratio of 'downloaders' to 'everyone else' is still huge, thousands to one.
  
  Learn to read, TAM.
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  - The Anti-Mike (profile), 11 Feb 2010 @ 9:16am
    
    Re: Re:
    1000 to 1? So the 20% in canada who download or the at least 10% in the UK who download are not downloaders?
    
    Do you think that a music downloader hasn't also downloaded a movie?
    
    *shakes head* How can you ignore what Mike posts up himself?
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    - Anonymous Coward, 11 Feb 2010 @ 9:28am
      
      Re: Re: Re:
      20% of 33 million is 6.6 million. 10% of 61 million is 6.1 million.
      
      12.7 million / 6.6 BILLION = one tiny little blip.
      
      We already know that you can't do math, so there's no need to continue proving it.
      [ link to this | view in chronology ]
    - Anonymous Coward, 11 Feb 2010 @ 9:44am
      
      Re: Re: Re:
      I thought at least 100% of Canadian internet users download?
      
      But then again, it's not illegal to download. That's what you do on the internet, you download things. Sure, some things are illegal to download but it's a blip compared to legitimate content.
      [ link to this | view in chronology ]
    - Luci, 11 Feb 2010 @ 10:04am
      
      Re: Re: Re:
      Can you back up those numbers? Use something other than industry reports, which we already know are skewed in their favor.
      [ link to this | view in chronology ]
- Jeremy2020 (profile), 11 Feb 2010 @ 9:30am
  
  Re:
  Plenty of streaming from netflix happening..
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- RD, 11 Feb 2010 @ 11:01am
  
  Re: TAMTARD
  "The number of folks accessing unauthorized movies online is still a blip
  
  So wait, are you saying that there is almost no downloading of movies online?
  
  Excuse me while I try to stop laughing."
  
  Then stop laughing. He didnt say "almost none" he said "a blip" as in, a small amount, a tiny fraction, barely a dent IN THE WHOLE OF THE INTERNET. The amount of people engaging in this is a SMALL FRACTION of all internet users.
  
  This has been pointed out to you REPEATEDLY yet you continue to blather on as if its some kind of MASS CONSPIRACY and EVERYONE (yes, EVERYONE, YOUR WORDS) is engaged in it.
  [ link to this | view in chronology ]
- wvhillbilly (profile), 11 Feb 2010 @ 7:48pm
  
  Re: downloading
  Hey! The !@# kids who are downloading probably wouldn't buy or rent the DVDs anyway, so where's the huge loss?
  
  Go figure!
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Anonymous Coward, 11 Feb 2010 @ 5:41am

Call the Whaaaambulance
"blames internet piracy"

Film at eleven
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Elaine Normandy (profile), 11 Feb 2010 @ 5:50am

My husband the videophile was a Netflix early adopter. When he explained the service to me, I was skeptical. No late fees? Up to five DVD's at a time, delivered and picked up at our rural mailbox? Prepaid postage? I thought there had to be a catch. When I couldn't find one, I knew then that this service was going to eat the lunch of Blockbuster and other rental stores.
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tuna, 11 Feb 2010 @ 5:56am

Looking at the timing of the posts the only conclusion I can make is that TAM is a department of some company, not a single person.
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- Hephaestus (profile), 11 Feb 2010 @ 6:48am
  
  Re:
  I thought "doesnt this guy ever sleep?"
  
  look over here something shiny, something shiny, dont pay attention to the article I am here to distract you. I noticed things he tends to really try to distract people on are ACTA and P2P. The P2P stuff he comes across as annoyed, the ACTA, and New tech (IPv6, etc) to stop P2P he is giddy.
  
  The problem is he doesnt understand the technology at all. He hasnt seen what people are developing software wise for Music production, Video production, Liscencing, management, promotion, distribution, payments, and P2P.
  
  The demo I saw of some next gen P2P stuff is scary. Cached Onion routing, Encryption, a huge redundant DFS, and a search function using both the cached onion router and the DFS. While I know this demo isnt going to be what is used for future P2P. Something like it will evolve to counter any laws put in place to stop P2P infringement. It will make any sort of ISP monitoring pointless and totally invalidates, 3 stikes, secondary liability of ISPs, etc.
  
  If TAM is a "him" or a "them" doesnt matter. What matters is that we should be discussing the articles and not paying attention to him.
  [ link to this | view in chronology ]
  - The Anti-Mike (profile), 11 Feb 2010 @ 9:18am
    
    Re: Re:
    Hep, I will make you a deal. Contact Mike, and with my permission he can give you the email address I signed up with. email me, and I will give you my phone number, which you can call me on and find out I am not a company, I am not in the music business, I am not an industry shill.
    
    Do you have the balls to do it?
    [ link to this | view in chronology ]
    - Luci, 11 Feb 2010 @ 9:23am
      
      Re: Re: Re:
      shill - a decoy who acts as an enthusiastic customer in order to stimulate the participation of others
      
      Yeah... you're a shill.
      [ link to this | view in chronology ]
      - Anonymous Coward, 11 Feb 2010 @ 9:45am
        
        Re: Re: Re: Re:
        TAM is a shill/troll or a shitroll.
        [ link to this | view in chronology ]
        
        The Anti-Mike (profile), 11 Feb 2010 @ 10:37am
        
        Re: Re: Re: Re: Re:
        and you are an anonymous asshole.
        
        enjoy.
        [ link to this | view in chronology ]
        
        Luci, 11 Feb 2010 @ 10:39am
        
        Re: Re: Re: Re: Re: Re:
        He's just as anonymous as you. Oh! Look at what I just did!
        [ link to this | view in chronology ]
        
        Anonymous Coward, 11 Feb 2010 @ 11:13am
        
        Re: Re: Re: Re: Re: Re:
        It's like looking into a mirror!
        [ link to this | view in chronology ]
        
        The Anti-Mike, 11 Feb 2010 @ 12:20pm
        
        Re: Re: Re: Re: Re: Re: Re:
        I hate you guys. You are all retarded poo poo heads.
        
        Why don't you just go back to prizon where you belong.
        [ link to this | view in chronology ]
        
        Anonymous Coward, 11 Feb 2010 @ 12:37pm
        
        Re: Re: Re: Re: Re: Re:
        Hint: You're anonymous too.
        [ link to this | view in chronology ]
    - Anonymous Coward, 12 Feb 2010 @ 5:18am
      
      Re: Re: Re:
      Congratulations, you've graduated from sophistry to insulting remarks about people's testicles on the internet.
      
      Well done. Truly a champion of big media interests.
      [ link to this | view in chronology ]
  - wvhillbilly (profile), 11 Feb 2010 @ 8:07pm
    
    Re: Re:
    Did it ever occur to the movie industry and the record industry they could make a mint simply by licensing filesharing? I'm sure the vast majority of people who share files would be willing to pay a few dollars a month to make it legal. What's 50 million people times $5 a month? Go figure.
    
    But apparently these industries would rather to stick to their rickety old worn out steam engine business model, tie down the safety valve, then wonder what happened when the boiler blows up. They get what they deserve.
    [ link to this | view in chronology ]
Danny, 11 Feb 2010 @ 6:06am

Well, more specifically, it blames the government for not doing enough to stop the sun from rising every morning... I mean, from stopping people from engaging in unauthorized file trading online.
Actually I think would be easier to stop the sun from rising every morning than stopping unauthorized trading. It would just be a simple matter of stopping the chain reactions that keep the sun lit, stopping the Earth from rotating, or stopping the Earth from revolving around the sun.

I personally use Blockbuster Online but this is just sad to see them kick and scream over losing in that country.
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Miguel Moura (profile), 11 Feb 2010 @ 6:08am

Well, as someone who actually lives in Portugal: most people here have blu ray and HD screens, so blockbuster actually made(or could make) perfect sense since not everyone wants to watch downloaded 720p compressed movies on their 1000€ home cinemas. The big problem with blockbuster, as far as I'm concerned, is that they have censored versions of most movies (we're not so restrictive when it comes to supposed "nudity" or "blood/gore" around here), the entire "drive over here and get your disc in hand" system just doesn't cut it (try driving around Lisbon and you'll know what i mean), most people won't go to the hassle of going out and getting in the subway just to get a movie, and cinema is not that expensive, specially with all the "buy one take two" movie ticket promotions you can get. I personally pay 3€ for ticket, whatever the movie, as long as I bring someone with me (which I do).

So Blockbuster ends up being something that only a couple of people around the block go to, and there's just not enough clients to keep their business model up. Period. Logically, bankrupcy ensues.
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- Killer_Tofu (profile), 11 Feb 2010 @ 6:25am
  
  Re:
  M. Moura I thank you for the insight into Portugal. It is always good to see posters from other countries show up and inform of us of what things are like. While I cannot speak for others, I am not so well internationally traveled. I have been through most of the US states and a bit around North America, but that is my limit (aside from one trip to Paris).
  So, I just wanted to say thank you for the info.
  [ link to this | view in chronology ]
- Hephaestus (profile), 11 Feb 2010 @ 6:57am
  
  Re:
  I was trying to research blockbuster competition in Portugal. Did they have any competition?
  
  Also thank you for the information on Portugal it was a path I wouldnt have thought to follow. Live and learn :)
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Jimr (profile), 11 Feb 2010 @ 6:20am

Blockbuster business model started to fail and they had no clue how to fix it. They grasped at straws while other innovative companies grew. They lost their edge and it maybe be impossible to regain those lost customers. I know for me that the choice of alternatives is growing each day and I doubt if I will even set foot in a Blockbuster this year.
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Anonymous Coward, 11 Feb 2010 @ 6:24am

Infringement: The modern IP excuse
I haven't rented a movie from a specific store in years. With options like Redbox and Netflix, it has never been easier for me to get a movie DVD or streamed and enjoy it on my own terms. And I'm more than happy so far to do so at their prices.

Speaking as Joe Movie Consumer, when it comes to movies, Piracy is a blip. What matters far more is the fact that shackling yourself to a specific pile of bricks to get a DVD, is no way to offer movies for rent anymore.
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Yogi, 11 Feb 2010 @ 6:27am

Their service is terrible
I recently tried to buy a DVD from blockbuster and I had 6 separate calls from their customer service, each one asking the same question: "do I really want only the DVD i chose and not, perhaps, these other ones that are on sale?"

That was annoying as hell. Needless to say, they lost a customer.

TAM - try downloading a movie and watching it on your TV - then you would know that the idea of DL movies hurting blockbuster is ridiculous. And also - why is DL hurting blockbuster but not netflix? I know, I know it's hard to make sense when you're not even trying...
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- Hephaestus (profile), 11 Feb 2010 @ 7:13am
  
  Re: Their service is terrible
  "And also - why is DL hurting blockbuster but not netflix?"
  
  Damn you beat me to it. Peoples habits are changing quickly as new business models crop up. The old school cant adapt fast enough. Now they are seeing new competition kill their old business models.
  
  In the case of Blockbuster in Portugal it was more local conditions (see the comment above by Miguel Moura) than P2P usage. Dont know yet about any competition.
  [ link to this | view in chronology ]
Anonymous Coward, 11 Feb 2010 @ 7:01am

Netflix, streaming, cheap movies
Like the other commenter's here I would agree. Between instant access movies from redbox for new releases, and my endless list of movies from netflix + streaming, and most older movies are 'cheap enough' to buy, I haven't been into a blockbuster for years. That and when I just 'have' to watch a movie I have all my DVDs in a single cd wallet that i have gotten over time. So I actually rewatch many of them!
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SureW (profile), 11 Feb 2010 @ 7:14am

I'm not sure I can live in a world that can't support Portuguese Blockbuster...
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- Hephaestus (profile), 11 Feb 2010 @ 7:22am
  
  Re:
  Dont worry ... someone will eventually copy redboxes business model in Portugal.
  [ link to this | view in chronology ]
Miguel Moura (profile), 11 Feb 2010 @ 7:20am

Glad everyone wants to hear about Portugal :)

As for competition, Blockbuster isn't (wasn't) the only rent-a-disc business around here, there are a lot of old VHS rentals that converted to DVD's and now Blurays, so there's quite a lot of family businesses revolving around renting discs, mostly in small towns with no movie theaters or not-so-good cable services (there weren't any Blockbusters there to start with anyway). In larger cities, you can get great HDtv+phone+100mbps net cable packages with on demand movies, our own equivalent to your TIVO, pay-per-view, and many other options.

Add that to cheaper movie theaters and the fact that Blockbuster wasn't actually that famous, and it's a recipe for disaster.

The funny part is that they're making a big deal out of this bankrupcy, and the truth is that they never were more than a passing fab a couple of years ago (I'll bet 90% of portuguese people never even heard of Blockbuster)..
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Justa Comment, 11 Feb 2010 @ 7:25am

Blockbuster Pricing
I hadn't used them for a year due to increasing rental prices. Now they have a 1 and 5 day price game that's even more stupid considering there's a $1 = 1 day redbox next door. It appears to me that they need to *FAIL* or their management be billed $20 to every sensible customer who tells them their fees suck.
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- Chronno S. Trigger (profile), 11 Feb 2010 @ 7:44am
  
  Re: Blockbuster Pricing
  This may be a new thing and it may even be local only, but me an my roommate were shocked to find a $1 per day Blockbuster rental box out in front of our local Sheetz.
  [ link to this | view in chronology ]
Hephaestus (profile), 11 Feb 2010 @ 8:21am

Summarizing what we learned so far ...
The article is about ... How Block Buster blames P2P for its failure in Portugal.

What we have learned from the posters here is ...

1) Block Buster has censored versions of most movies. That is a really big selling point in any market. (Sarc)
2) Going to the Movies cost 3 euros when you go with a friend. Personally I would rather see the movie in the theater.
3) They are inconvienient to get to unless you live around the block from them.
4) Portugals Cable systems have streaming video, on demand Video, DVR's, and 100 mbit connection speeds.
5) They had 27 store in the entire country. That leads to real brand and name recognition. (Sarc)
6) They have competition from other Video rental stores.
7) Most people in Portugal have 1080p TV sets and P2P infringing videos are most often at 720p. I know everyone goes out of their way to watch Cam'ed videos on their 1080p LCD tvs. (sarc)

Conclusion :
It seems like alot of small things contributed to the failure of BlockBuster in Portugal. P2P probably played some role but not as much as the execs at Block Buster believe. The contributing factors were, inconvienince, competition from Cable, competition from theaters, competition from other rental places, lack of brand recognition, and censored movies.
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- The Anti-Mike, 11 Feb 2010 @ 12:38pm
  
  Re: Summarizing what we learned so far ...
  Don't be silly, this article is obviously about the definition of the word blip, because I'm incapable of arguing the actual point.
  [ link to this | view in chronology ]
Da Man, 11 Feb 2010 @ 7:35pm

Blockbuster stinks
I actually tried Blockbuster's mail service which is similar to Netflix, only you can drop your movies off at the store. 1) If you made the mistake to put them in the mail, it would take almost 2 weeks to get another one, unlike Netflix which had a much faster turn over of only 3 or 4 days at the most. 2) Dropping the movies off at the store only made the service about even with Netflix in terms of turn over speed. However, eventually, there started to become slackers on sending new movies out, and I had to fire them. So, I'm not surprised of their business woes...
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