Former CEO Jim Keyes: Why Blockbuster Really Died and What We Can Learn from It – D Magazine

“Contrary to popular belief, Netflix did not kill Blockbuster,” Keyes said. “Blockbuster actually had a better opportunity to be Netflix today than Netflix did, and that’s what I was hoping … to accomplish.”

Source: Former CEO Jim Keyes: Why Blockbuster Really Died and What We Can Learn from It – D Magazine

No, Keyes killed Blockbuster.

I’m watching the Netflix documentary on Prime. It paints a sympathetic picture of Netflix (at least, so far), so I don’t understand why it’s not on Netflix. I’d like to understand why this is the case. Anyway.

In 2007, Blockbuster’s foray into DVD’s-by-mail was going pretty well. They had successfully navigated bringing up a complicated service, and getting a couple million customers. Even though they were still hemorrhaging money at the time, they had something. Around that time, major Blockbuster stakeholder, Carl Icahn, refused to pay the current CEO, John Antioco, his bonus, so he left. Icahn installed Jim Keyes, formerly of 7-11. Keyes wanted to “double down” on the physical stores, and scuttled their postal offering. The documentary has Antioco and the guy running their by-mail service on camera explaining all of this, so this isn’t second-hand hearsay. Yet, here’s Keyes, 10 years later, in 2018, saying that he was trying to lean into the subscription offering, and blaming all of their troubles on banking. I mean, say that you nixed the offering because you had insurmountable debt problems, and hoped that cutting it loose would help you refinance in the current market, but don’t claim that you were hoping to be a “better Netflix than Netflix” when you killed the service.

And, of course, Keyes continued to collect his $750,000/yr salary and $500,000 bonus, in the same year as the company was filing for bankruptcy. This is the disconnect in the American oligarchy. We Americans pride ourselves on our supposed meritocracy, but if we really had a meritocracy, Keyes would only have been able to collect his bonus if he had successfully navigated the banking climate back then, and procured a better exit strategy for Blockbuster than selling it wholesale to Dish. He’s rewriting history here, and I’m betting it’s because he’s looking for another gig. Wikipedia doesn’t list his age, but the date of his MBA puts him still in his early 60’s.

We’ve reached a point with the web now that you can go back pretty far, and still get to actual, reported sources. There’s no running from history when Google makes it so easy to find, and major web sites’ content management systems have gotten so good at keeping their links working…

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