Alan Payne - Built to Fail: The Inside Story of Blockbusters Inevitable Bust

The stories of failed companies are often told by their former leaders, whose main objective is to protect their own legacies. They sometimes acknowledge mistakes but more often cast themselves as victims of forces out of their control. The same is true of all Blockbuster CEOs. None have accepted responsibility for what happened. They blamed the companys demise on everything but themselvespredecessors, successors, bad movies, financial markets, uncooperative Hollywood studios, recessions, weather, anything but their own mistakes. But mistakes were made, and as you will discover, many were outright reckless.

This book is the comprehensive story of Blockbuster from start to finish, told by someone who was there the longest. You can find countless articles and academic studies about the company, and most of them are factual and informative. But when the writers attempt to draw conclusions about why Blockbuster failed, most of them get it wrong. Some horribly wrong. It is not intentional. They just do not know what they do not know.

I ran video stores for 31 years, longer than just about anyone. The first six years were spent competing with Blockbuster when I ran operations for a chain of video superstores called Video Central. It was owned by the H - E - B Grocery Company, one of the most highly respected retail companies in the world. Our stores dominated Blockbuster, but I left when H - E - B decided to sell Video Central.

I spent the next 25 years as a Blockbuster franchisee and profitably ran our stores longer than anyone elseexcept for the very last store that still operates in Bend, Oregon. I saw it all and was on the receiving end of some of the most ill - advised business decisions imaginable. My company, Border Entertainment, survived years longer because we did not follow Blockbusters lead and, in most cases, did the exact opposite.

Blockbuster was consistently outsmarted and outmanaged by smaller companies. And the challenges began earlier than you thinklong before Netflix was even an idea in the minds of founders Reed Hastings and Marc Randolph.

Blockbuster was phenomenally successful in its early years and made thousands rich beyond their wildest dreams. But Wayne Huizenga built the company to grow and nothing else. And even though his successors had ample time to rescue Blockbuster from itself, we know that did not happen. Blockbuster became one of the most iconic brands in the history of American business, but it cracked at the first sign of a challenge. From its founding, Blockbuster was a company built to fail.

Roston, Tom 2017, I Lost It at the Video Store , 117

I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to a woman home alone.

Jack Valenti, former President of the Motion Picture Association of America, in his 1982 testimony before Congress

Yes, there was a time when you couldnt watch a movie or television show whenever or wherever you chose. Just forty years ago, the content producers (mostly Hollywood studios) controlled your viewing schedule. New movies were released only in theaters for limited runs, then taken away for years at a time before reemerging in repeat runs, or television where they appeared only in their designated time slots. The studios had complete controlthat is, until the video cassette recorder (VCR) was introduced in 1975. And that meant war!

The VCR led to the creation of the video store and eventually Blockbuster. But, had the studios had their way, it would never have happened.

The studios believed copyright laws granted them complete control over their content, which included preventing citizens from recording programs on VCRs for private use. In 1976, led by Universal and Disney, the studios filed a lawsuit against the Sony Corporation to ban sales of its Betamax video recorder, and implicitly the VHS video recorder made by JVC. Remarkably, in 1981 (after there were already millions of VCRs in American homes), the Ninth Circuit Court of Appeals found in favor of the studios. Sony was, therefore, liable for copyright infringement by Betamax users. The lower court was ordered to impose an appropriate remedy, which included banning sales of the VCR. Hollywood had won.