Memo to Blockbuster's Agency

To: Bob Chimbel, DDB Entertainment
cc: All Innovative Ad Execs Throughout the Cosmos

Congratulations on winning the Blockbuster account, and on using it as the prompt to pull together all of your far-flung entertainment-related units into a single shop-within-Omnicom in Dallas.   

I understand that your client's CEO plans to transform the Blockbuster brand "into an entertainment provider" just like Apple did for its business.  He has been working to evolve from a video-rental chain to a full-service media delivery company, according to the article I read in Advertising Age.

Somebody needs to tell you that the strategy is doomed.  Even if it weren't, you're not the right guys to deliver it.

Sorry.  I mean no insult to your skills.  It's just that the mandate reflects a fundamental misunderstanding of what's going on the marketplace, and it promises to misapply your marketing skills to challenges that not even the most brilliant, innovative marketers could overcome.

I see three primary issues:

1. First, the world needs another media delivery company like it needs a hole in the head.  I don't care if the brand names are originally analog (Time/Warner, Wall Street Journal) or digital inventions (name the failed portal of your choice), the online distribution business is more a wireless-and-pipes play than anything else.  What could Blockbuster possibly bring to this marketplace that Comcast, Amazon, YouTube, or any number of other entrants don't already offer (or, worse, have tried and discarded)?
2. That's because, second, Blockbuster is a store, not a brand name, and certainly not an entertainment provider.  To even suggest otherwise is to reveal a misplaced belief in the (your) ability to overcome reality, and convince people of things that are simply not true.  There's no Blockbuster without the geophysical stores and physical merchandise.  That's why the comparisons to Apple are incorrect: Apple sells hardware, and wraps an enabling service around it.  In fact, it created a sustainable ecosystem where none existed, in order to sell its gizmos.  So the right corollary for Blockbuster would be to invent new reasons for consumers to visit its stores.  DVDs are Blockbuster's iPods, and once people don't need to fondle them any longer, I don't see what the company puts into its stores instead.  Do you?  Is that part of your remit?
3. Finally, the really bad news for you and your fellow marketers is probably a hidden, underutilized strength: Blockbuster is a habit or routine more than a choice. Nobody ever attached any meaning to it beyond perhaps, on the good side, an appreciation of its geographic convenience and, on the negatives, the potential to interact with surly or clueless employees (not to mention the reasonable probability that the title you wanted to rent is already checked out). Consumers used to stop by Blockbuster to "find something to watch" much like they'd pull up to a service station to "get some gas for the car."  There's absolutely nothing wrong with that -- like I said, I believe that such routines are immensely powerful -- but it's certainly not entertaining.

Any stock analyst with a critical bone left in his or her body should be writing as much, but since we've been hearing this "entertainment brand" nonsense since, well, I was with the company in the mid 1990s, it should be old to someone other than me by now.

So any Blockbuster transformation would require a substantive change in the very premise of its business; it would have to be something far more meaningful than marketing, and a lot more inventive than anything we've ever heard before from the company.  I have no idea what it might be, but I'm thinking things like giving away Blu-Ray players to Blockbuster members, or building studios for UGC in every store. 

The plans would have to originate in operations, and create a set of proprietary, value-add services only available in-store.  Exclusive content from the studios, maybe events.  Some reverse-logic distribution arrangement that was supported with actions that truly redefined why people needed to visit the stores.  Big, structural, business-changing actions.

I suspect that making the brand more about entertainment is just not one of them.  And this news should serve as a cautionary tale to other capable, well-intentioned, innovative marketers who might presume to fix client problems that they just not able to fix.

Comments

[Denise Lee Yohn]

jonathan -- thanks for saying what needs to be said, as you usually do.

jim keyes, blockbuster's ceo, came to the movie rental chain after a 21-year stint at 7-11 and he is credited with turning around that business, producing record sales and profits.

Three moves from his 7-11 playbook might actually serve blockbuster quite well:

1. new retail systems technology that improved product assortment decisions in every store

2. new in-store electronic services like a kiosk for cashing payroll and personal checks, purchase money orders, and pay bills (in blockbuster's case, perhaps this could be about paying for content and loading it onto personal electronic devices in one easy, convenient, super high-speed step?)

3. collaboration with manufacturers to develop new products (perhaps blockbuster could work with movie studios and content producers to create custom products -- e.g., exclusive boxed sets, etc.)

It seems like a "retail guy" like Keyes would put more focus on reinvigorating blockbuster as a retail brand? Hmmm, I feel a post of my own about this topic coming on -- do you mind?!

[Gabriel Rossi- Branding]

Hello Jonathan,

Great post just as your book! :)

I tend not to agree with your point though: "would have to be something far more meaningful than marketing". In fact, I do believe Marketing is everything a company does (Drucker 1954).

Blockbuster needs to go outside and organize every aspect of its business according to consumer's expectations and needs. I agree 'Place' is a great factor as well as 'People'.

If we think about Blockbuster's situation, Theodore Levitt made exactly this point ages ago on his seminal article "Marketing Myopia".

Blockbuster needs Marketing. Marketing as an ideology instead of a tool box.

If we considered chapter 5 of "The Practice of Management", would Marketing be everything Blockbuster needs?

Cheers from Brazil,

Gabriel Rossi

[Frederick Miller]

Uhhh...topless sales clerks? No one else has tried it. You could have the family side of the store segregated from the "Adult" side. Obviously no one under 18 even when accompanied by an adult would be allowed in. I'm thinking of suggesting it to Starbucks frankly. Imagine how uhh....sales would rise. I'd even drink their instant coffee for that. Yeah...right.

[Georges van Hoegaerden]

Yeah, Blockbuster needs a big overhaul; a business overhaul. But I believe there is still opportunity to do so, the media distribution marketplace is just warming up and some of the vendors in it are making fundamental macro-economic mistakes that new (or old) brands can benefit from.

But you're spot on that marketing at this point for Blockbuster is a waste of money.