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Days after the nation was shocked with the news that entertainment retailer, HMV, would be going into administration; Blockbuster video rental chain became the third high street retailer to collapse into administration. Jessops camera specialists were the first UK company to go into administration this year and have ceased all trading in store and online.
More people however are hopeful that HMV can pull through and it is believed many potential buyers have showed interest in keeping the iconic brand alive, albeit with some smaller stores possibly closing down.

Blockbuster is an American based movie and video game rental company however, it is just their UK stores which have been struggling and are now at risk of closing. This hints at a worrying sign that something within the UK market is not favouring high street shopping. Ecommerce websites no doubt definitely have a role to play in this; however there could be some underlying issues which industry experts will need to look at in more detail.

Is Ecommerce Solely To Blame For Blockbuster’s Downfall?

Similar to HMV facing difficulty from ecommerce websites like iTunes and Amazon providing digital copies of music at lower prices, Blockbuster had to deal with the pressures of not only online competitors like Love Film and Netflix, but also free online streaming of the latest movie releases and television shows through video sharing sites.

Blockbuster was an initial success before the boom of the internet and digital; as customers could see their favourite films and play the latest games without having to commit to a full purchase of the item. However once their current online competitors began offering home delivery, Blockbuster’s profits took a hit. Ecommerce websites have the benefit of having no costs running a store, and as more people have access to devices that can download and display videos; renting DVDs has become less necessary.

Glyn Mummery from FRP Advisory, insolvency specialists, said “This has been the worst Christmas period on the high street in living memory. The new age of online retailing has caused a bloodbath in the electronics and entertainment markets for old-school retailers.”

Sadly many people have been unsurprised by Blockbuster’s fall. Ian Maude at Enders Analysis commented, “Why would you go to a store for a frankly limited selection of films when you can browse Netflix for any film that’s ever been released, or watch it on Sky or Virgin?”

Blockbuster did try to make a move into the online arena but only through rental services. With no option to watch the films online, they remained one step behind their competitors.

While the general consensus amongst some is that solely online is the way to operate, multichannel solutions run alongside a physical chain of stores has been proven to work. Many retailers like John Lewis, Halfords and large supermarket chains are enjoying continued success in difficult times.

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