// STARTUP COMPARISON
La Máquina vs Blockbuster
La Máquina failed in 2022 due to Unit Economics. Blockbuster failed in 2010 due to Competition. Different causes, different sectors, different eras — but the same simulation outcome.
| METRIC | 🔥 La Máquina | 🔥 Blockbuster |
|---|---|---|
| Sector | Media | Media |
| Country | Chile | USA |
| Founded | 2016 | 1985 |
| Died | 2022 | 2010 |
| Raised | $2M | Public company |
| Peak | 2M monthly readers | $5B valuation · 9,000 stores |
| Primary Cause | Unit Economics | Competition |
// WHY EACH FAILED
🔥 La Máquina
Unit Economics
La Máquina built a digital media brand in Chile covering technology and business for 2M monthly readers. As Google and Facebook absorbed digital advertising revenue in Chile, advertising rates for local publishers fell 60% between 2016 and 2022. The company attempted to transition to paid subscriptions but the Chilean market's subscription adoption was too slow to offset advertising revenue losses. La Máquina shut down in 2022.
// LESSON
Digital media advertising models are in terminal structural decline in every market Google and Facebook reach. Start the subscription transition before you need it. By the time advertising revenue is insufficient, you have two years of runway left — not enough to build a subscription base.
Digital media advertising models are in terminal structural decline in every market Google and Facebook reach. Start the subscription transition before you need it. By the time advertising revenue is insufficient, you have two years of runway left — not enough to build a subscription base.
🔥 Blockbuster
Competition
Blockbuster had 9,000 stores and 60M registered members at its peak. In 2000, Reed Hastings offered to sell Netflix to Blockbuster for $50M — Blockbuster declined. Blockbuster relied on $800M in annual late fees to subsidize its real estate costs. Netflix eliminated late fees in 2005. Blockbuster filed for bankruptcy in 2010.
// LESSON
If your business model depends on customer pain as a revenue source, digital will eliminate that pain and your revenue simultaneously. Convenience always wins.
If your business model depends on customer pain as a revenue source, digital will eliminate that pain and your revenue simultaneously. Convenience always wins.
// EXPLORE FURTHER