Blockbusted
How Blockbuster fell at the first hurdle
I was hesitant to write about Blockbuster. Practically everyone knows the story (the firm got left behind and ultimately failed because it got replaced by streaming). What else is there to be said?
Well, it is a great case study of Thematic Strategy.
I argued in my PhD research and forthcoming book that adopting Thematic Strategy will help firms to achieve market dominance…and not adopting it is a sure path to failure.
Here’s the (simplified) checklist:
Has the firm strategically selected 3-4 drivers of technological and social change to align with?
Has the firm translated the selected drivers of technological and social change into a distinct competitive position?
Has the firm focused its internal resources and capabilities entirely on building assets required to deliver the chosen competitive position?
These are sequential questions, and Blockbuster failed at the first step: it didn’t select clear long-term drivers to anchor its strategy.
The firm operated as if the physical rental model would hold its shape, even though the underlying forces were already shifting. Internet technologies were expanding, broadband adoption was rising, and customer behaviour was moving towards convenience and on-demand access. These were visible structural shifts, not short-term trends.
A company that applied Thematic Strategy would have identified at least three relevant drivers at the time: internet technologies, digital distribution, and changes in consumer culture. Each of these had long-term growth, clear cross-industry relevance, and direct actionability. Yet, Blockbuster treated them as marginal developments rather than the foundation for a new strategic direction. This early misjudgement sealed the future failure of its business model.
Blockbuster’s story is not about a single bad decision. It is about the absence of a disciplined way to read the world and align with the forces that shape it. Firms that build around long-term drivers create the conditions for advantage. Firms that ignore them give it away.
—————
I write about Thematic Strategy - a method I developed during my PhD that directs firms to leverage drivers of technological and social change to achieve market dominance.
> Subscribe to my newsletter for my latest research.
> Follow me for more like this.