Former President at Hotels.com
Scott joined Hotels.com in 2003 when the company was a Dallas-based startup. He spent 5 years in product and customer marketing before moving to SVP where he was responsible for the global website and product development. In 2012, Scott was then promoted to President of Hotels.com with full P&L responsibility. Scott previously spent 3 years at Blockbuster as Senior Director of Strategic Marketing for Blockbuster Online, the incumbent competitor to Netflix, where he was competing directly with the now video streaming giant. Read moreView Profile Page
Scott, can you set the context of you joining Blockbuster, in 2003, 2004?
The company, at the time, had about 9,000 retail stores around the world and probably, top line, around $6 billion in sales. When I joined, my primary role there was a senior director of strategic marketing. I had responsibility for developing products, both in store and online, using technology. One of the things we weren’t good at, when I first started and what I brought to the table, was helping to develop a CRM solution, to help re-engage and reactivate customers.
One of the things we noticed, pretty early on, is that 15% to 20% of our actual revenue was coming from late fees. We all knew it was an issue and my group was responsible for trying to figure out how to solve that. It was the albatross around our neck. How do we solve this problem? Netflix was just a little bitty company, coming up. But during this time period, my group had about 20 people and we were all using Netflix. We kind of had to, because it was competitive and we were trying to keep up with what was going on in the marketplace, but it was a better service, straight up. We were all using it and trying to figure out how to replicate it, in our world. I had some colleagues, from my team, that went to the executives at the time and said, we either need to buy these guys or partner with them or something, because they are going to eat our lunch, at some point.
The executives were old school, brick and mortar, 7-Eleven, Circle K kind of convenience store guys and just weren’t very strong on the technology side of things. It was one of those, yes, that’s kind of a niche play; we’ve got other issues to deal with; let’s not worry about that, right now. Honestly, within a year, we ended up saying, we’ve got to do something now.
I was put in charge of building up the user experience and the branding for Blockbuster online, from that standpoint.
How were you marketing to consumers Blockbuster online versus Netflix?
I actually thought we had a winning formula. Remember back then, you mailed the DVD to the consumer, so it took two days for the DVD to get to the consumer. Then if you wanted to immediately turn it round and send it back, it was a two-day turnaround. So four days, total. We’ve got 9,000 stores, one on every corner of every major city so why not offer the consumer, yes, if you want to mail it back, that’s fine. But if it’s Friday night and your kids need a DVD, why don’t you just come down to the store and you can swap it out. In fact, we would have had 9,000 distribution centers, across the world. That’s how we tried to go to the market with it. You can do it through the mail or come to the store and swap it out. I thought we had a good proposition, from that standpoint.
What didn’t work about that?
Unfortunately, during this time period, the brick and mortar stores were bleeding money. The problem was getting enough investment and resource, to focus on developing that online platform. It was very, very difficult. Hindsight is 20/20. It’s easy to make calls now. In the heart of it, I think, if the executives had known what was going to happen, they would have tried to do everything they could to put more investment and resource into building that out. It was a little bit too late, to be able to fund that initiative.
But Blockbuster tried to buy Netflix, I think, in 2003, maybe, or 2002? What happened there?
There were some discussions about that. I don’t really know if it got very far, because of valuations and so on and so forth. A couple of years ago, I ran across somebody that was head of marketing, at Netflix, at the time that this was going on. They were just about to enter into the UK and start getting into Europe. When they found out that we were going to launch Blockbuster online, they actually pulled all their resources out of developing in Europe, to try to focus on beating us, in the US. It was a real threat for them. But I don’t think it ever went very far, for us to buy them, or any combination, from that standpoint.