A Blockbuster Night Becomes A Blockbuster Memory

It seems like yesterday when I was telling high school seniors that they couldn’t get a Blockbuster account in Boston without a credit card. The year was 2003 and the credit card industry was going through a new phase in its revolution – targeting college freshmen with credit cards.

My point back then was that we were heading into a plastic world because of the growing acceptance of online commerce (remember Internet usage had only been around in a significant way for 5 years at that point). Kids were going to be given credit cards at a rapid rate and they needed to know about the contradictions – that they can help establish credit but also get you into trouble fast if you don’t keep your eye on the ball.

Now Blockbuster is no more – they filed Chapter 11 bankruptcy last week and it appears that they wipe its balance sheet clean of debt. Senior bondholders owed about $630 million are hoping to convert all that debt into ownership stakes in a restructured Blockbuster. Lower-ranking bondholders owed about $300 million would be wiped out.

Blockbuster’s plight comes amid major shifts in how consumers view video content. Consumers now get most of their movies through vending machines operated by Redbox, a unit of Coinstar Inc., and from mail-order and online streaming giant Netflix Inc. Consumers have also gravitated toward cable on-demand services and getting films and television shows through gadgets such as Apple Inc.’s iPod and iPad.

So what’s my point?

The pace of change right now in terms of consumer tastes and desires is faster than ever. We want everything NOW – in the palm of our hand would even be better. All we have to do is sign up for the subscription services – X-Box, Netflix – Amazon – Bravio – the list goes on and on. $8.99 here - $4.99 there – don’t forget the data plan from your cell provider - $70 or so. It’s not cheap to buy entertainment convenience, but it’s your choice.

VHS & DVD movies, music CD’s, video games, books, magazines, newspapers – all being replaced by digital subscriptions. Have you calculated how much you spend on subscriptions each year?