This month’s documentary selection, “The Last Blockbuster,” was a hefty serving of nostalgia, accompanied by some economics. Many of you were more interested in those smaller morsels on the side.
Heather F. wrote in to say that while she appreciated the discussion of the value of physical objects you can hold, smell and carry …
“In the end that stuff felt too long by about 30 minutes, even though I get that it was the primary intent of the film and I often enjoy that kind of thing. I got a lot more out of one brief clip from [Chief Financial Officer and Executive Vice President] Tom Casey somewhere in the middle of the film, where he offered that it wasn’t Netflix that put Blockbuster out of business — it was a capital availability problem at a crucial moment, made worse by the financial crisis and subsequent recession of 2007-09.”
J.C. added:
“It was disappointing the film did not address, beyond a brief mention, the egregious behavior of Viacom in milking a well-performing company (or franchise) for cash. … We have another generation coming of age since the financial crisis that needs to understand, at a basic level, how that works and what it can destroy, including financial devastation of franchisees.”
Jackie M. said she took that lesson to heart.
“The documentary made me realize the real reason for Blockbuster’s decline was ultimately its being sold to someone who milked it for its cash and then took on too much debt. As the owner of a small company, they’re mistakes I don’t ever want to make!”
Matthew V. thought the film may have missed a few opportunities for more economic lessons.
“A very important part of this movie that gets overlooked is how large corporations ignoring innovative technology can seal their fate. … Blockbuster displayed a level of hubris in their stagnant business model that proved to be their downfall. When I was in college (2002-2006), I worked at Blockbuster and it seemed obvious to me at the time: Netflix was just a cooler company than Blockbuster, and you could easily see how their business model would work. You could see the future, and it looked so wonderful. How do the CEOs of big companies not see this? There has to be some tragic inflated level of arrogance and denial at the executive management level that causes these companies to collapse. Honestly, I don’t feel sorry for them.”
We’ll be back next week with a preview of our June selection for the “Econ Extra Credit” documentary film series. Got a documentary recommendation you’d like us to consider? Email us at extracredit@marketplace.org.
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