Blockbuster Bankruptcy Reveals Three Future Trends in Techonolgy

As Dish Network moves forward with its purchase of Blockbuster, ahead of it’s bankruptcy, the once powerful brand has become a symbol of the rise of technology and the demise of bricks and mortar stores. Where will audiences turn for their fix of action, drama or a hardy laugh or cry? Didn’t World War II show that no matter what is happening in the world, people need to be entertained? Yet, this has been a lackluster year at the box office, the television landscape is radically changing with the diversification of channels and my neighbor is watching the entire NBA Playoffs on his Iphone. Here are three trends in technology made apparent by the demise of Blockbuster.

The Fall of Chain Bricks and Mortar Video Stores

Blockbuster’s demise began with the rise of Netflix. Rather than competing with their upstart rival, the mega-chain attempted to poorly mimic Netflix’s mail-delivery service. The nail that sealed Blockbuster’s fate was the success of Netflix’s streaming service. Audiences could instantly gain access to thousands of hours of content and stream them to their television sets. So, to no one’s surprise, last September, Blockbuster ran up the white flag and surrendered by filing for Chapter 11 bankruptcy. They’d racked up nearly a billion dollars in debt and their creditors wanted blood. Blockbuster has already closed nearly a third of its stores nationwide. Now, Blockbuster’s new owner, Dish Network, has recently announced they’ll be closing another 1,000 locations.

The Rise of Streaming Video

Everyone knew it was going to happen eventually, the intersection of the web and television. Who can forget those weird keyboards AOL TV tried to foist on the masses back in 2000? Well, bandwidth is finally robust enough to bring streaming movies and television together. And there are new delivery systems that allow customers to stream those movies directly to their television sets. New televisions will even be equipped with a “Netflix Button” on their remote controls this spring. Hulu’s CEO, Jason Kilar, recently rankled some studio heads when he posted this on the company’s blog, “Traditional TV has too many ads … consumers are increasingly moving to on-demand viewing, in part because of the lighter ad load” He continued, “Consumers also want the freedom to be able to watch TV on whatever screen is most convenient for them, be it a smartphone, a tablet, a PC, or, yes, a TV.” The old business model of studios delivering content to distributors, i.e., television networks or theater chains, had no way to accommodate these demands from their audience.

The Power of Social Networking

When Facebook says they’re going to enter a specific marketplace, the world takes notice. Stock prices change. The Earth trembles? No … But, when the social network said they were going to start streaming movies, the theater chains quaked. Of what use is a movie theater if the studios can deliver the content through social networking sites? And, what filmmaker wouldn’t want their movie marketed to 600 million Facebook users? It’s becoming clear that social networks are going to play a role in the future of content delivery. But, they also affect entertainment in a different way. Consider how Groupon recently teamed up with Lionsgate to sell tickets of their film, “The Lincoln Lawyer.” They pre-sold 10,000 tickets for the film just in Los Angeles alone. Social media can also sink a bad film because world of mouth travels now at the speed of light. Of this Kilar posted, “Consumers now also have the power to immediately tank a bad series, given how fast and broad consumer sentiment is disseminated. This is nothing short of a game-changer for content creators, owners, and distributors.” Power to the people! Thanks to social networking sites and crowd funding sites like and, audiences can generate the content they want to see and collectively demand what movies receive distribution.