ITERATE OR DIE: Reflecting on Blockbuster & Atari

January 23, 2013, 2:50 pm

I’ve been thinking a lot about the downfall of Blockbuster and Atari. Both companies are in the news because of financial collapse. Can you believe that Blockbuster was once a $6 billion company? And Atari had the jump on everyone with regards to consoles and games. I spent countless hours playing Pitfall! and never beat it. Today I don’t even own a game console– everything I play is on my phone or iPad.


Articles about why they fell apart all point to failure to innovate despite knowing that change was necessary. This quote sums it up:


 “Blockbuster continued to see itself as a provider of movie and game rentals rather than a distributor of entertainment. By locking itself into this narrow view, they ignored the innovations happening around them and believed that people wanted to come into the store and talk to their staff, get recommendations, and make their choice, but of course this was not the case. The internet provided all the recommendations they needed and the convenience of renting with a few mouse clicks became impossible to beat.” Michael Woloszynowicz


I know that others have placed libraries on the same projection as Blockbuster—I admit that the similarities are apparent. My Dean and I were talking about business models yesterday; here is the gist. Libraries (like Atari and Blockbuster) are content providers. Migrating that content from one form to another—from print to digital—isn’t enough.


Just as Blockbuster had too narrow of a view of itself, the same problem applies to libraries. At Virginia Tech we’re positioning ourselves to not only provide content, but to support content production. We think of this as not only about access to information, but also about enabling the creation of new knowledge. We’re evolving from a warehouse model toward a studio model.


Kodak provides another good example of failure to innovate despite knowing that it needed to do so. In 1979 they realized that digital photography would eventually replace film. They were well positioned to lead that change, but they didn’t. They took a wait-and-see attitude. They developed technology and secured patents, but they could not implement. In January 1979 their stock was $61. Today it is $.17 (Not dollars, cents!)


If we don’t take the initiative to change our operating models, then someone else will change them for us. Iterate or die, folks.


Ok—my next post will be positive and uplifting, I promise.

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