The CEO Who Saw It

Published 17 August 2026

A few months ago, the reason for Blockbuster’s decline was the central idea we looked at. Its bust-up, which you can read about here, all stemmed from focusing on the wrong problem. 

That narrative fits comfortably with what we like to tell ourselves: that businesses fail because of what they didn’t see coming. Blockbuster didn’t see how much people’s values and desire for convenience was shifting. They were too slow to adapt. They had all the information in front of them and somehow missed it.

It’s a nice story. 

It’s also not exactly how it happened. 

Management did choose to ignore and misread customer data which ultimately led to Blockbuster’s downfall. But, only a few years before, one of the most interesting things about Blockbuster is that the person running the company did see the problem very clearly.

John Antioco, the CEO, understood that business was changing. 

He knew that customers hated late fees. He knew that people were beginning to move away from physical stores. And, he understood that Netflix offered a fundamentally different way of renting films. 

So he acted. 

Blockbuster invested in an online DVD business to compete with Netflix. It launched Total Access, allowing customers to move between online rentals and physical stores. And, perhaps most importantly, late fees were scrapped.

While that decision may sound trivial now, it wasn’t. Late fees were enormously profitable. 

Removing them meant deliberately giving up a significant and reliable source of revenue.

That decision was asking Blockbuster to sacrifice part of what was making it successful today in order to give it a chance of being successful tomorrow. 

Antioco could see the future. He had identified where the need for change lay. But his vision of the future required him to damage the present. 

The strategy became increasingly unpopular with the board and with investor Carl Icahn, who objected to the cost of the changes and the pressure they placed on short-term profitability. 

As a result, Antioco eventually resigned as CEO. And all his new measures and strategies were turned back.

Blockbuster returned to the road it had been on. Meanwhile, Netflix kept moving.

The usual lesson is that Blockbuster didn’t see Netflix. The more uncomfortable lesson is that they saw it coming and couldn’t follow through. 

Because how often is the real problem that you don’t know what needs to change?

The information isn’t necessarily missing. The problem is that acting on it threatens something. A comfortable customer, a reliable revenue stream or a familiar way of working. 

Late fees were very profitable for Blockbuster at the time. But the important question they were unable to ask is: “What does keeping late fees prevent us from becoming?”

Success gives you a reason not to change. 

For Blockbuster, the warning signs were there. The company even had a CEO who understood what was happening and tried to act on it. What it struggled to do was to carry the rest of the business around the consequences of that decision.

Because Antioco didn’t fail for want of seeing it, or for want of trying. He pushed the change so hard that it cost him his job. What he lacked was enough support to hold the line against the people with a stake in keeping to the old way.

A business owner reading this has no board and no activist investor. But the same forces are there. A cautious partner. A long-serving employee who built the old way. A husband or wife who would rather not risk what’s working now. All reasonable. All, apparently, the reason to leave it alone.

The lesson isn’t to ask whether you can see the problem. It’s to ask whether you’re prepared to do what seeing it requires.