Why Blockbuster’s success in Canada is a bad news story

I noticed today in the Globe that while Blockbuster (the movie rental company) has declared bankruptcy in the United States, here in Canada the branch of the company is doing fine, indeed it is still profitable:

Blockbuster Canada vice-president and general manager Barry Guest said in a statement early Thursday that its operations are still profitable. “Blockbuster Canada operates independently of the U.S. and is financially stable,” he said.

So how can this be a bad news story?

Clues to the answer lie deeper in the article, in this paragraph:

Once a home entertainment powerhouse in the United States, Blockbuster has been losing market share and money for years as more Americans rent DVDs from subscription service Netflix Inc. and popularity surged for streaming video over the Internet.

Let’s be clear, Blockbuster in Canada is profitable not because it has been innovative. Not because it has reinvented itself in a digital era. Not because it has been visionary. Blockbuster is okay because the innovations and services that have devastated its southern partner basically aren’t available in Canada. In short, when it comes to rolling out cutting edge services (or even kind-of cutting edge services) in the digital media/infrastructure space Canada falls short.

bbcanada1This, of course, is well documented (hello cellphone contracts!) and it is the real story here! How can Canada – and Canadian companies – expect to be leaders in the digital space (I’m looking at you, forthcoming Digital Economy Strategy) if even the most mainstream services available in the US (mainstream enough to destroy an incumbent) haven’t even made it north of the border? Domestically, who are we competing with, competitors from an analog era? This is not a marketplace that is likely to produce the next Tivo, Netflix or whatever.

This story feels like a metaphor for pretty much everything that is wrong with innovation and competitiveness in this space in Canada, right down to the fact that we appear to celebrating the ongoing success of blockbuster. Sigh.

12 thoughts on “Why Blockbuster’s success in Canada is a bad news story

  1. Doug Bastien

    how do you explain Zip.ca (our north-of-the-border Netflix equivalent) for not successfully taking off and compromising brick-and-mortar boxed movie rentals? Seems that Canada’s had its chance to subvert Blockbuster, and may see it on a delay, a 1-year delay from the United States.

    Reply
  2. Doug Bastien

    how do you explain Zip.ca (our north-of-the-border Netflix equivalent) for not successfully taking off and compromising brick-and-mortar boxed movie rentals? Seems that Canada’s had its chance to subvert Blockbuster, and may see it on a delay, a 1-year delay from the United States.

    Reply
    1. Brentonwalters

      Zip’s service is far from convenient and doesn’t compare to Netflix’s DVD service in the US, and they don’t offer streaming.

      Reply
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  4. Cara

    Within the last 3 months all but one of the dvd rental places (2 Rogers and 1Blockbuster) have shut down in my neighbourhood in Ottawa. The remaining one isn’t very impressive in what it rents or sells, either, because the emphasis seems to be on selling cell phones or digital packages, rather than dvds. I wonder what’s happening?

    Reply
    1. Consumptiongirl

      I heard, but I also heard that the selection is limited to older movies and tv shows. Not exactly what I’m interested in. I’ll be impressed when they have a new movie service for that price.

      Reply
  5. Cjottawa

    I saw this news story the other night (“Blockbuster Canada doing fine”) and had thoughts along exactly the same lines Dave. Thanks for articulating this.

    This does present Blockbuster Canada with an opportunity: take note of what happened to its mothership south of the border, learn and adapt or die. History will be the judge in a few months or a few years.

    Reply
  6. Rob Cottingham

    Thanks for this post, Dave. It would be interesting to know just where this particular logjam is situated. How much of this has been a question of technical infrastructure and teleco failures, and how much has been an issue of content licensing (which was supposedly the big stumbling block for the Kindle)?

    Reply
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  8. Pingback: Some theories on why Canadians are the #1 user of YouTube (it’s not all good) | eaves.ca

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