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Thursday, November 7, 2013

Blockbuster Dissolves While Netflix Prospers: Evolutionary, Psychological, and Religious Explanations

In November 2013, the world learned that Blockbuster would be closing its remaining 300 video stores and even its DVD/VHS-by-mail service. Meanwhile, Netflix was making a foray into producing programming, effectively leveraging its streaming-video service. Why is it that one group, or company, of people fail to adapt while another seems to easily ride a powerful wave of change without falling? Drawing on evolutionary biology, I provide a context that distinguishes the two companies.[1] Within this framework, I proffer a possible psychological explanation involving the survival of a human being and the self-perpetuation telos (i.e., goal) of human genes.
At one point, Blockbuster had 9,000 stores. The company made the transition to DVD from VHS, yet both the company’s management and that of Dish Network, which bought Blockbuster in 2011 for $320 million at auction when Blockbuster was emerging from chapter 11 bankruptcy, were slow to grasp the velocity of the next generation as evinced in Netflix’s streaming-video online.[2] Even within Netflix, natural selection seems to have been working its way as the company developed a “mutation” of producing programming to rival—and even potentially replace—the television networks’ own programming. That is to say, a punctuated equilibrium, or evolutionary leap instead of gradual, incremental adaptations via slight mutations, can take place within a company rather than only from company to company to company over time.  
Relative to Netflix, even Dish Network can be viewed as being antiquated in its own mutational innovations. People accustomed to the business model wherein for a fee of less than $10 a month, they can receive as much streaming video as they wish would doubtlessly perceive even Dish’s “Blockbuster @Home” add-on (for an extra fee) available to Dish pay-TV customers and the company’s “Blockbuster On Demand” service available to the general public as strangely antiquated. For example, a business practitioner staying at a hotel while travelling could not but see the “On Demand” feature on the room’s television as rightfully belonging to yesteryear as he or she lays down on the bed, laptop perched on the chest, with a streaming movie from Netflix ready to go.
I submit that it is no coincidence that Blockbuster and its acquiring parent company—two groups of people, really—had so much trouble letting go an existing business model and associated strategy even after changes in the industry as well as the business environment had already begun to incapacitate the mindset undergirding the model and supporting strategy. Moreover, a mindset framing a strategic business model is itself lodged in a broader attitude not just regarding change, but also the self. A narcissistic or egoist personality disorder, for example, can be expected to include a proclivity or inclination to hold onto whatever ideology (consisting of values, beliefs, and basic assumptions), belief system (e.g., a creed), and “knowledge” the person has.
The pull of the self to hold onto itself is based on the unity-of-the-self assumption and the instinctual urge to survive. Survival can include the person’s dignity and how he or she is perceived by others. Where concern for the self is excessive even for the person’s own good, the person’s “field of vision,” or perspective, narrows artificially. As a result, the need for strategic change is apt to be missed. Rather than being oriented to finding a means of attaining a punctuated equilibrium, the person (and persons in the same local culture) finds his or her referent in the status quo—in the self-supporting or enabling “substance” composed of ideology, value, belief, attitude, mentality, and even perspective.
In short, people differ in the degree to which they clutch to whatever appears necessary to one’s self-identity and viability (and ultimately survival). A culture can easily form as a few people who clutch at what they “know to be true” at the expense of being invested in change (not to mention being open to or inclined toward it) share or infect other people close by as though via an air-born pathogen. One such culture tends to gravitate toward another like culture. Hence, Blockbuster and Dish Network. Meanwhile, other cultures form on the basis of the meta-assumption that change is good, even (and especially) when it manifests in a dynamic-oriented rather than static personality. Hence, Netflix.
Ironically, an orientation to, and thus value ascribed to, letting go of what a person takes to be crucial for the self to have substance and a supporting or framing architectonic enables the self to grow rather than starve. At a company level, a culture of such people is necessary to being able to serially adapt—not to mention find a punctuated equilibrium (via qualitative change)—especially when change is the only constant in the business environment (i.e., after the Victorian era). When change itself has become the status quo or default, a company’s very survival may entail such a mentality and culture.
Christians may recognize the paradox by thinking of the concept, agape, which is divine self-emptying love. Through grace, the divine love internal to the person manifests as the self’s voluntary self-emptying. This sort of love differs from that of caritas, which is human love. It is directed, or raised up, to eternal moral verities (Plato) or God (Augustine) and fueled by the same energy that manifests as garden-variety lust. After all, hot air rises. Although sex is no stranger to corporate games, it is not, at least from a Christian standpoint, fueling the movement toward change. From an evolutionary standpoint, however, sex (as well as sustenance and shelter) is very much involved in any adaptive inclination. The Christian explanation is in line with what the Buddhists coined as empty your cup.
Whether as a person or group, being focused on emptying one’s cup because only then can it be filled with new fluid is in turn premised on the assumption or belief that the self itself is fluid—like a river continually of water but never the same molecules at the same place. In contrast, the self of a narcissist is like a frozen mill-pond that suffocates any life within.
Whether from the standpoint of natural science or religion, groups of people can be distinguished by their respective attitudes toward change, which in turn reflect differing felt-understandings of the nature of the self and how it can best be fulfilled, protected, or sustained. The people at Blockbuster had to disperse at the possible expense of their livelihoods (i.e., sustenance) even as (and because) they were able to hold onto their firmly-held beliefs and assumptions. Meanwhile, the people at Netflix were not only sustaining themselves, but also prospering; they did so by prizing adaptation and, relatedly, a fluid, and thus adaptive, notion of self that in turn reflects favorably on their own selves, whether from an evolutionary, psychological or religious perspective.  

1. In taking this approach, I am following in the path-breaking footsteps of William Frederick. See William C. Frederick, Natural Corporate Management: From the Big Bang to Wall Street (Sheffield, UK: Greenleaf Publishing, 2012).
2.Roger Yu, “Blockbuster to Shutter U.S. Stores, “ USA Today, November 7, 2013.