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.
This, 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.