Click here to read this NY Times story by Brian Stelter. Excerpt:
"Blockbuster, which had more than 9,000 retail stores across America just nine years ago, is closing the few hundred video-rental stores that it still has, the company’s owner, Dish Network, said on Wednesday in a bittersweet but long-expected announcement.
Dish, which acquired Blockbuster through a bankruptcy auction in 2011, after the retailer had already been crushed by digital video distributors like Netflix, said it still saw value in the brand name and would use it in limited ways. But it will close all Blockbuster locations — it says there are about 300 left — and the distribution centers that support its DVD-by-mail service, which is also being dismantled.
The announcement amounted to a surrender: a statement that Netflix, symbolized by its little red envelopes and more recently its streaming service, had prevailed over the little blue boxes that Blockbuster VHS tapes and DVDs came in."
This reminds me of my favorite economist Joseph Schumpeter and his theory of innovation. The process whereby innovations occur was called "Creative Destruction" by Schumpeter in his book Capitalism, Socialism, and Democracy. "Creative Destruction" was
"The opening of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U. S. Steel illustrate the same process of industrial mutation if I may use that biological term-that incessantly revolutionizes the economic structure from with in, incessantly destroying the old one, incessantly creating the new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in (p. 83)."