WobbleFlix?

As part of the CEM certification course I help teach, we look at how channels have unique interaction characteristics that can create strategic advantage. Netflix offers DVD rentals online, with a rental queue. Blockbuster was traditionally a brick-and-mortar location. 

Netflix has more titles than your local Blockbuster. You don't have to leave your house to choose your next movie. Or to get it. Sure, there's a delay (but Amazon.com has gotten us used to this ... ).

Netflix as a result has been growing gangbusters, while Blockbuster was feeling the heat. Then they got into the online business. We go through very careful analysis of the site experiences and churn rates for online customers at each firm. Things were looking good for Blockbuster's strategy.

Except that the board, and the stockholders, felt that Blockbuster's investments were just too costly. Profits plummeted while they acted like a growth-obsessed startup instead of the cash cow they had been. CEO? Fired. New CEO has a Southland Corporation background, all retail and supply chain. 

Ah, now we come to today. 

Netflix, hot on the heels of Blockbuster's new CEO, is actually reeling a bit. But it's because they've lost some growth momentum to Blockbuster's combined online/retail model. Rent online, return to your local store (not all stores are participating.)

The saga continues. Will Blockbuster continue to pick away at Netflix? Or is the new CEO a signal that Blockbuster doesn't want to compete online?

Check out the Netflix earnings story here .