It's hard to discern what is more newsworthy about that sentence: that there is only one left, or that, in 2018, there are any Blockbusters left. After all, Netflix and other streaming services decimated Blockbuster's once powerhouse business, to the point it went bankrupt in 2011 and Dish Network bought its assets.
The last corporate stores closed in 2013, leaving an increasingly small number of privately-owned stores who licensed the name. Two Blockbusters in Alaska announced last week they were closing, leaving the Blockbuster store in Bend, Ore. as the sole remaining licencee.
The New York Times, The Washington Post, Time, and Yahoo Finance, CBS News, CNN, among others. People are flocking to the Bend store, not to rent movies but to take selfies of themselves in front of an actual anachronism.
Some wax nostalgic. "There are still people in America, and especially in this town, who enjoy the experience of strolling into the video store on a Friday night," Time reported. General manager Sandi Harding was more pragmatic, citing customer service and their local connection as the reasons the Bend store has managed to survive.
It's almost hard to remember quite how dominant Blockbuster once was, with 9,000 locations at its peak. It killed off countless smaller chains and mom-and-pop video stores, only to fall victim to an upstart -- Netflix -- that it failed to take seriously enough until it was too late. Blockbuster could have even bought Netflix for a measly $50 million back in 2000, eliminating or incorporating the threat before it had a chance to truly threaten its business.
Healthcare, are you paying attention?
There have been countless dissections of Blockbuster's various missteps and missed opportunities. Customers hated those pesky late fees, which Blockbuster had grown heavily reliant on to keep its profits healthy. While Blockbuster had grown big due to the convenience it offered -- more locations and more titles -- those still could not match the convenience of streaming or even of Redbox.
Still, its management, particularly then CEO Jim Anticoco did identify the threats and came up with a strategy to counter them. It actually was starting to work until he was fired due to investor concerns about the cost of the strategy. His replacement reversed course and, well, as I've said, there is now only one Blockbuster store left, and it is not even owned by Blockbuster.
|The Blockbuster store in Bend, Ore. (Sandi Harding)|
1. Bigger is better! No doubt about it; big is often good. Just look at the reach and market cap of the big tech companies -- Apple, Amazon, Alphabet, Microsoft, Facebook, and Alibaba. Blockbuster thought it could dominate by putting a retail location as many places as possible, and it worked.
Until it didn't.
Healthcare is going through its own version of this. Hospital chains are consolidating, gobbling up hospitals and physician practices. Health insurers are doing the same, and not just with other health insurers -- witness United Healthcare's acquisition of DaVita's primary care and urgent care centers, Cigna's buying Express Scripts, or Humana's purchase of Kindred Healthcare, not to mention CVS buying Aetna.
Having lots of retail locations, consolidating market power, vertical and horizontal integration -- all time tested strategies, and ones healthcare organizations are following. Just like Blockbuster relied on. It works until something new like Netflix comes along and crashes the party.
2. It's the personal touch! People like the human touch. People like interacting with other people. People like advice from knowledgeable experts. People like the social aspect of going someplace that has other people seeking the same experience.
Sandi Harding is still touting all those, bless her, but it's not unrelated that she's at the last Blockbuster. People voted with their keyboards: they liked having DVDs mailed to them -- with no late fees! -- and liked streaming even better. They didn't even have to leave the house! They could order, even watch, movies in their bathrobes if they wanted to. And they could get recommendations from algorithms well enough to not need recommendations from the retail clerks, who may have had encyclopedic knowledge of movies or may have just known the latest blockbuster.
It is entirely possible that having the same doctor over a period of years actually can improve your mortality, as a new study seems to confirm, but people are notoriously short-sighted when it comes to their health. If online doctors or even bots can give health advice that is good, or good enough, for many people that is going to beat getting in the care and driving someplace.
People say they like the personal touch, but never underestimate the American consumer: given a reasonable choice, they'll opt for convenience almost every time. Even in healthcare.
3. Stop annoying people! I have to confess -- I once was a Blockbuster customer. I don't think I ever had a late fee, but I was aware of them, and I made sure I returned videos even before I'd seen them just to avoid paying them.
With Netflix, though, I didn't have to worry about it. Sure, I could only rent so many at a time, but I could keep them until I was ready to return them. No late fees. Netflix didn't seem like it was nickle-and-diming me (although those nickles and dimes added up to billions for Blockbuster).
Healthcare has plenty of "late fees." Try facility charges, try inflated charges, try prescription drug pricing, try unnecessary tests, not to mention literally going after people with collection agencies when they have a hard time paying some of those exorbitant costs.
And these are from professionals and organizations who claim to have our best interests at heart.
Customers will revolt. They will switch to options that don't penalize them for things they don't think they've done wrong. Blockbuster couldn't convince itself, or its investors, that killing the golden goose of late fees was necessary, and healthcare is now finding itself in the same situation.
If healthcare doesn't listen to, and learn from, these and other lessons, as hard as it may be to imagine now, in a few years we may be reading about the last remaining hospital or even the last doctor's office.
Just ask Blockbuster.