Nothing succeeds like success

 

I've always thought that, although I know almost nothing about sports, I could be a sports announcer. They mostly just spout arcane statistics, punctuated with truisms like “The team with the most points is the winner at the end of the day” and “Even a good team can play a bad game.”

Same for business commentators. They have all their own arcana – quadruple-witching days, P/E ratios, derivatives – but they always end with something like “At the end of the day, the company that makes the most money is the best investment.” I swear. If you don't believe me, tune into CNBC almost any time of day.

There was an odd little piece in the Times today about success and failure on the Internet – why Netflix and Amazon have succeeded, and Blockbuster and Barnes & Noble have failed. Turns out that this particular commentator wrote a little piece in 1997 saying that, now that Barnes & Noble was going to move onto the Internet, Amazon was doomed. We know how that story came out, right? He was a good sport about it, though, along the lines I described above - “You never know,” “Sometimes there are hidden variables,” yak yak yak.

But he mostly talks about Netflix and Blockbuster. Remember when Blockbuster was going to move into the mail-order DVD business and take all of Netflix's business away? Blockbuster was slightly cheaper, as I recall, and you could rent and return DVDs at the store locations as well as through the mail. All in all, it looked like Blockbuster had the business all sewed up.

But they failed. They're now selling for seven cents a share, by the way (I just checked).

Mister Business Analyst has all kinds of Monday-morning quarterback theories about this. (These guys are always great about explaining why things happened the way they did. Not so great at predictions, though.) Netflix had secret bar-code reading machines that were more efficient. They had a better business plan. They focused on the home-delivery business more intensively, without worrying about building brick-and-mortar stores. They made less management mistakes.

Perhaps.

Let's try looking at our own anecdotal evidence – what we do as individuals, to see if that gives us clues about general behavior.

We have been Netflix subscribers for at least seven or eight years. (We gave it up for a year or so – we found we weren't keeping up with the three-at-a-time delivery – and resubscribed with a slightly cheaper one-at-a-time plan, with which we are still very happy.)

I remember when Blockbuster came out with their mail-order plans. The ads were all over TV. “No late fees ever!” Slightly lower price than Netflix, as I said. And we had a Blockbuster store about two blocks away.

So why didn't we switch?

• One: brand loyalty. Netflix had been very reliable and easy to use: in the whole time we've used them, we've gotten maybe two or three bad disks and one wrong movie (it was Police Academy 5, and I was so bemused that I watched it anyway).

• Two: being able to rent/return from the Blockbuster store was not an appealing prospect. Video stores were fun for about ten minutes when they were new in the 1990s. After a while, I found that it was more like a death march around the store, desperately trying to find something good, being followed by the blank stare of the teenager behind the counter. Much easier, much more pleasant, to set up your queue on line.

• Three: corporate snottiness. When I told Partner what I was writing about this evening, he said very angrily, “You can say that I still have a bad taste in my mouth about all those late fees I paid over the years.” Blockbuster actually thought that people would be grateful for their discontinuation of their nasty little late fees. Instead, people thumbed their nose at the company and said, “We'll stay with Netflix, thanks.”

For a while, I saw the yellow-and-blue Blockbuster envelopes in the mailbin at work, along with the red Netflix envelopes. I wondered if Blockbuster would actually take over.

After a while, the yellow-and-blue envelopes disappeared.

At the end of the day, the more successful company succeeds.

See? I could be a business commentator too. Move over, Maria Bartiromo.