Changes

of home movie and video game rental services through a video rental brick and mortar style store, streaming media, in-name-only on-demand video service, and formerly DVD-by-mail and a cinema theater.  

of home movie and video game rental services through a video rental brick and mortar style store, streaming media, in-name-only on-demand video service, and formerly DVD-by-mail and a cinema theater.  

Blockbuster expanded internationally throughout the 1990s. At its peak in November 2004, Blockbuster employed 84,300 people worldwide, including about 58,500 in the United  

Founded in 1985 by David Cook, Blockbuster began to expand domestically and eventually on an international level into the the 1990s. When Blockbuster was experiencing "peak performance" of employees and profitability according to their public records, Fall 2004 was this time period. During this time Blockbuster employed 84K people worldwide, 31 percent of those employees were in the [[United States]], for a total of 9,094 stores.

States and about 25,800 in other countries, and had 9,094 stores in total, with more than 4,500 of these in the US.

Competition from the [[Netflix]] mail-order service, Redbox automated kiosks, and video on demand services, in addition to when Blockbuster spun off [[Viacom]] taking an insurmountable $905 million loan to pay a special dividend to Viacom shareholders for the privilege, were major factors leading up to Blockbuster's eventual demise. Progressively, Blockbuster began to lose significant revenue during the 2000s, and the company filed for bankruptcy protection in 2010. The following year, its remaining 1,700 stores were bought by satellite television provider Dish Network, eventually selling of its last corporate-owned Blockbuster stores in 2014 leaving a handful of franchise-owned stores and today only 1 store left. as of today.

Competition from the mail-order video services, easily accessible automated kiosks, video on demand services were the publicly known reasons for the downfall of the video empire. Based upon new research more evidence shows the  single biggest mistakes is when Blockbuster spun off of [[Viacom]] taking an insurmountable $905 million loan to pay a special dividend to Viacom shareholders for the privilege, were major factors leading up to Blockbuster's eventual demise. Progressively, Blockbuster began to lose significant revenue during the 2000s. Blockbuster officially filed for bankruptcy protection in early 2010. In 2011, Blockbuster's remaining 1,700 stores were bought by satellite television provider Dish Network, eventually selling off its last corporate-owned Blockbuster stores in 2014 leaving a handful of franchise-owned stores and as of 2020, only 1 store left.  

 

As of 2019, the Blockbuster brand has mostly been retired. Dish still maintained a small number of Blockbuster store franchise and brand licensing agreements, which allowed some of the remaining privately owned franchised stores to remain open in the US and worldwide between 2014 and 2018. As of November 2019, the only remaining physical Blockbuster (a privately owned franchise) store in the entire world remains open in [[Bend, Oregon]], colloquially known as '''the Last Blockbuster'''.

==Slogans==

==Slogans==

==Revenue sharing agreements and Business model==

==Revenue sharing agreements and Business model==

[[File:Columbia pictures logo.jpg|right|thumb|250px| Columbia Pictures, Sony logo]]

[[File:Columbia pictures logo.jpg|right|thumb|250px| Columbia Pictures, Sony logo]]

The standard business model for video rental stores of old was to pay a large flat fee per video, at approximately $65, and offer unlimited rentals for the lifetime of the medium itself.  Prior to 2002 Blockbuster has said late fees account for 15 percent of its revenue as part of it's business model.

The standard business model for video rental stores of old was to pay a large flat fee per video, at approximately $65, and offer unlimited rentals for the lifetime of the medium itself.  Prior to 2002 Blockbuster has said late fees account for 15 percent of its revenue as part of it's business model. Essentially movie studios sold VHS tapes to rental companies like Blockbuster for about $65 apiece, so a store had to rent out each tape about 30 times to make back the money.

Sumner Redstone, whose Viacom companies then owned Blockbuster, had personally pioneered a new revenue-sharing arrangement with a few studios, starting with his at the Viacom owned Paramount pictures between Blockbuster video in the mid-1980s. Blockbuster reported rental information through Rentrak, a global media measurement and research company serving the entertainment industry. Blockbuster's revenue sharing would be at little-up front costs allowing the video store giant to keep 60% of the rental fees, paying approximately 40% to the studio it had agreements with on many new releases. In addition to benefiting from a lower initial price, Blockbuster also capitalized on the fact that movies were generally not available for purchase at affordable pricing during initial new home video release periods. Thus customers had a choice to rent from Blockbuster, wait, or buy the film on tape at the much higher (MSRP) Manufacturer's Suggested Retail Price targeted at other rental chains and film enthusiasts, which was pricey and ranged between $70–$100, depending on the film title.

American billionaire businessman and media magnate Sumner Murray Redstone, whose New York based Viacom Inc. conglomerate companies then owned Blockbuster, had personally spearheaded a new revenue-sharing arrangement with a few studios, starting with his at the Viacom owned Paramount pictures between Blockbuster video in the mid-1980s. Blockbuster reported rental information through Rentrak, a global media measurement and research company serving the entertainment industry. Blockbuster's revenue sharing would be at little-up front costs allowing the video store giant to keep 60% of the rental fees, paying approximately 40% to the studio it had agreements with on many new releases. In addition to benefiting from a lower initial price, Blockbuster also capitalized on the fact that movies were generally not available for purchase at affordable pricing during initial new home video release periods. Thus customers had a choice to rent from Blockbuster, wait, or buy the film on tape at the much higher (MSRP) Manufacturer's Suggested Retail Price targeted at other rental chains and film enthusiasts, which was pricey and ranged between $70–$100, depending on the film title.

Examples of revenue sharing between Blockbuster and the Hollywood studios were as follows: On August 25, 1998 Columbia-Tristar Home Video owned by [[Sony|Sony Pictures Entertainment Inc.]] and Blockbuster Videos Inc. agreed on a revenue sharing agreement that lasted 4 years. Within this agreement is a Sony Pictures "Share of Rental Revenue period" paid by Blockbuster to them. This 26 week period that Sony Pictures profits from is approx 40% revenue sharing starting from the new release date of the video until the end of the 6 week new release video period. Furthermore $2.00 US Dollars of the Upfront Price shall be deducted from Sony Pictures's share of rental revenue for each video copy, typically the total cost was $3.25-$3.75 per video copy, leaving the rest of the [[profit]] for Blockbuster within the 26 week New release period. After the 26 week period Blockbuster is free to sell of copies of the rental picture once this Revenue sharing period expires. Blockbuster would typically keep in their older library 3-4 copies of the film and sell the rest off as a (PVT), Previously viewed tape.

Examples of revenue sharing between Blockbuster and the Hollywood studios were as follows: On August 25, 1998 Columbia-Tristar Home Video owned by [[Sony|Sony Pictures Entertainment Inc.]] and Blockbuster Videos Inc. agreed on a revenue sharing agreement that lasted 4 years. Within this agreement is a Sony Pictures "Share of Rental Revenue period" paid by Blockbuster to them. This 26 week period that Sony Pictures profits from is approx 40% revenue sharing starting from the new release date of the video until the end of the 6 week new release video period. Furthermore $2.00 US Dollars of the Upfront Price shall be deducted from Sony Pictures's share of rental revenue for each video copy, typically the total cost was $3.25-$3.75 per video copy, leaving the rest of the [[profit]] for Blockbuster within the 26 week New release period. After the 26 week period Blockbuster is free to sell of copies of the rental picture once this Revenue sharing period expires. Blockbuster would typically keep in their older library 3-4 copies of the film and sell the rest off as a (PVT), Previously viewed tape.

The standard business model for video rental stores had traditionally been to pay a large flat fee per video, approximately $65, and offer unlimited rentals for the lifetime of the medium itself. Sumner Redstone, whose Viacom conglomerate then owned Blockbuster, personally pioneered a new revenue-sharing arrangement for video in the mid-1980s. Blockbuster obtained videos for little cost and kept 60% of the rental fee, paying the other 40% to the studio, and reporting rental information through Rentrak. In addition to benefiting from a lower initial price, Blockbuster also capitalized on the fact that movies were generally not available for purchase at affordable price points during initial release periods. Thus customers had a choice to rent, wait, or buy the film on tape at the much higher Manufacturer's Suggested Retail Price targeted at other rental chains and film enthusiasts, which at that time ranged between $70–$100 per title.  

The standard business model for video rental stores had traditionally been to pay a large flat fee per video, approximately $65, and offer unlimited rentals for the lifetime of the medium itself. Sumner Redstone, whose Viacom conglomerate then owned Blockbuster, personally pioneered a new revenue-sharing arrangement for video in the mid-1980s. Blockbuster obtained videos for little cost and kept 60% of the rental fee, paying the other 40% to the studio, and reporting rental information through Rentrak. In addition to benefiting from a lower initial price, Blockbuster also capitalized on the fact that movies were generally not available for purchase at affordable price points during initial release periods. Thus customers had a choice to rent, wait, or buy the film on tape at the much higher Manufacturer's Suggested Retail Price targeted at other rental chains and film enthusiasts, which at that time ranged between $70–$100 per title.  

===Quantity and selection of titles===

===Quantity and selection of titles===

Blockbuster stores followed a strategy of emphasizing access to the most popular new releases, obtaining early access and stocking many copies of the new-release titles, with a relatively smaller depth of selection than traditional independent video stores. Much of the shelf space in the stores was devoted to popular titles that were placed relatively sparsely on the shelves with the entire front cover visible, so customers could browse casually and quickly, rather than having a more diverse selection with fewer copies of each title. Blockbuster sometimes contracted with studios to obtain earlier access to new titles than other companies could achieve. Examples of such contracts were those in which Blockbuster became the exclusive rental chain for new releases from the World Wrestling Federation (now known as WWE),  Paramount Pictures, DreamWorks Pictures, [[Universal Studios]], [[Harvey Weinstein|The Weinstein Company]], Miramax, Lionsgate, [[Disney]], 20th Century Fox, [[MGM]], [[Sony]], Image Entertainment, [[Warner Bros.]], New Line Cinema and Allumination FilmWorks. As one commentator complained, "Blockbuster was once an unstoppable giant whose franchises swept across the country putting mom and pop video stores out of business left and right by offering a larger selection of new releases, pricing them at a lower point due to the volume they worked in... Gone were the fragmented, independently owned shops that were often unorganized treasure troves of VHS discoveries. In their place were walls of new releases: hundreds of copies of a small handful of films. Everyone watching the same thing, everyone developing the same limited set of expectations... They put focus entirely on what was new rather than on discovering film history ..."

Blockbuster stores followed a strategy of emphasizing access to the most popular new releases, obtaining early access and stocking many copies of the new-release titles, with a relatively smaller depth of selection than traditional independent video stores. Much of the shelf space in the stores was devoted to popular titles that were placed relatively sparsely on the shelves with the entire front cover visible, so customers could browse casually and quickly, rather than having a more diverse selection with fewer copies of each title. Blockbuster often time butted heads with studios to get an edge on earlier access to new movies/videos than other companies could succeed at. Blockbuster became the exclusive rental chain for new releases from big name studios as in Paramount Pictures, [[Universal Studios]], [[Harvey Weinstein|The Weinstein Company]], [[Disney]], 20th Century Fox, [[MGM]], [[Sony]], [[Warner Bros.]] plus many more.  

When a title was no longer a new release, each store would retain a few copies of it and typically sell off the rest as "previously viewed" or as employees called them "PVT's" aka "previously viewed tapes" for discounted prices. Older movies would be re-categorized as "Blockbuster Favorite" titles and placed in a different area of the store.Most Blockbuster locations also accepted trade-ins of used movies, TV shows, and games.

==History==

==History of the franchise==

===1985–1997: David Cook era===

===1985–1997: David Cook===

Blockbuster's early beginnings can be traced back to another company, Cook Data Services, that was founded by David Cook in 1978. The company's primary goal was to supply software services to the oil and gas industries throughout [[Texas]], but it was not very successful. Sandy Cook, David's wife, wanted to get into the video business, and her husband would soon study the industry and future prospects. Using profit he made from the sale of David P. Cook & Associates, the subsidiary of his company, he decided to buy into a video store franchise in Dallas known as Video Works. When Video Works would not allow him to decorate the interior of his store with a blue-and-yellow design, he departed the franchise and opened the first Blockbuster Video in 1985 under his own company Blockbuster Video Inc.

Sandy Cook, David Cook's wife, liked the idea of renting videos as a business model, shortly thereafter, the Blockbuster concept took off, and her husband would soon study the video industry and future ways to concquer small mom and pop videos stores after taking over the larger competitor video chains. Profitability from their sale of David P. Cook & Associates, the subsidiary of Cook's company, The husband and wife decided to approach a local Dallas video store called Video Works with the hopes of getting fully into the Dallas Texas video store franchise. The Cook's upon running their own Video Works, had asked corporate to allow them to paint the interior of their store a yellow and blue color with a specific design. Te corporate response was no. So the Cook's departed Video works, then proceeded to open the first Blockbuster Video as an incorporated company officially in Fall 1985 in [[Dallas]] Texas. With early successes from the Blockbusters expansion and new stores opening under the company name, Cook built a $6-million video warehouse in [[Garland, Texas]].

The first Blockbuster store opened October 19, 1985, in [[Dallas]], Texas, with an inventory of 8,000 VHS and 2,000 Beta tapes. Cook's experience with managing huge databases proved helpful in driving innovation within the industry. Following early success from the company's first stores, Cook built a $6-million warehouse in [[Garland, Texas]], to help sustain and support future growth that allowed new stores to open quickly.

Nintendo of America, Inc. v. Blockbuster Entertainment. (1987) When home console videogames from the likes of Atari, Nintendo Coleco-vision, etc. boomed in popularity in the 1980s, Blockbuster rented specifically nintendo games out to their customers, too. Gaining ground as the largest Video game manufacturer, Nintendo, sued Blockbuster for copyright infringement over copies of their video game manual booklets that came with each video game cartridge. Nintendo claimed Blockbuster was doing unauthorized rentals of Nintendo videogames as a was a violation of federal law. Ultimately the two parties would eventually settle the matter out of court, with Blockbuster retaining the legal right to continue the practice. Nintendo successfully prosecuted Blockbuster for providing photocopied instruction manuals along with its rental NES carts. Blockbuster unsuccessfully argued that it was only protecting its investment in the original manuals, as it would cost more to replace the originals than it would to photocopy replacements. In this particular part of the case, the courts found in favor of Nintendo, therefore Blockbuster was required to start providing the original manuals with its rental games. Blockbuster still would'nt be forced into doing this practice so thy would only provide the manuals if a customer specifically asked for one form the back of the store or if one was available in a drawer. Still early on there were only 19 Blockbuster stores, and the upward potential attracted Wayne Huizenga's associate John Melk. Gaining Melk's attention due to Blockbuster's efficiency, business model, family-friendly image and he convinced Huizenga to have a look at it. Huizenga and Melk utilized techniques from their waste business and Ray Kroc's model of expansion to rapidly expand Blockbuster, and soon they were opening a new store every 24 hours. In 1987, Huzienga and the two partners purchased a controlling interest in Blockbuster Entertainment for $18.5 million and began setting out to acquiring video store competitors like the Las Vegas video-superstore chain Major Video and Movies to Go, a 29-store chain based in [[St. Louis]]. They took over many of the existing Blockbuster franchise stores as well, and Huizenga even spent much of the late 1980s acquiring several of Blockbuster's rivals.

In 1987, the company won a court case against [[Nintendo]], which paved the way for video game rental. Also that year, Waste Management, Inc co-founder Wayne Huizenga, who originally had reservations about entering the video rental industry, agreed to acquire several Blockbuster stores. At that point the number of stores counted 19, and attracted Huizenga's associate John Melk's attention due to its efficiency, family-friendly image and business model, and convinced Huizenga to have a look at it. Huizenga and Melk utilized techniques from their waste business and Ray Kroc's model of expansion to rapidly expand Blockbuster, and soon they were opening a new store every 24 hours. In 1987, Huzienga and the two partners purchased a controlling interest in Blockbuster Entertainment for $18.5 million and began setting out to acquiring video store competitors like the Las Vegas video-superstore chain Major Video and Movies to Go, a 29-store chain based in [[St. Louis]]. They took over many of the existing Blockbuster franchise stores as well, and Huizenga even spent much of the late 1980s acquiring several of Blockbuster's rivals.

[[File:Blockbuster-Store-Exterior-.jpg|thumb|right|The exterior of a Blockbuster store in Mankato, [[Minnesota]]]]

[[File:Blockbuster-Store-Exterior-.jpg|thumb|right|The exterior of a Blockbuster store in Mankato, [[Minnesota]]]]

In 1990, Blockbuster bought mid-Atlantic rival Erol Onaran which had more than 250 stores. In 1992, Blockbuster acquired the Sound Warehouse and Music Plus music retail chains and created Blockbuster Music. In October 1993, Blockbuster took a controlling interest in Spelling Television-Entertainment Group, a media company run by television producer Aaron Spelling. Blockbuster purchased Super Club Retail Entertainment Corp. on November 22, 1993 from Philips Electronics, for 5.2 million shares of Blockbuster stock. This brought approximately 270 Record Bar, Tracks, Turtles and Rhythm and Views music stores and approximately 160 video retail superstores into the corporation. It also owned 35% of Republic Pictures; that company merged with Spelling in April 1994.

In 1990, Blockbuster bought Erol Video Club's mostly on the East coast totaling 250 stores from owner Erol Onaran. Shortly thereafter, Blockbuster acquired the Music Plus music retail chains and created Blockbuster Music in 1992. The same year Blockbuster acquired Sound Warehouse.  

*1993, Blockbuster acquired control of Spelling Entertainment Group Inc. in a $141.5 million stock swap, expanding its reach in home entertainment programming. took a controlling interest in Spelling Television-Entertainment Group, The Spelling TV Group also owned 35% of Republic Pictures; that company merged with Spelling in April 1994.

Blockbuster became a multibillion-dollar company, but Huizenga was worried about how new technology could threaten their business, such as video on demand and the growth of cable television. In 1991, just three days after Time Warner had announced it would upgrade its cable system, Blockbuster's shares dropped more than 10 percent. In 1993, he made an attempt to expand into other areas by investing in Viacom. Huizenga also considered buying a cable company, but this was unknown territory for Blockbuster and he decided not to take the risk. He also had the idea of a 2,500-acre Blockbuster sports and amusement park in Florida, something Blockbuster was still considering as late as August 1994. Unable to come up with a proper solution about how to face the growing threats to the traditional videostore, he made the decision to sell Blockbuster to Viacom and pull out. Viacom acquired Blockbuster in 1994 for $8.4 billion to help finance its bid for Paramount Pictures in the bidding war with QVC Network Inc.  

Wayne Huizenga was worried about how new technology could place a threat to Blockbuster's business even though Blockbuster had become a multi-billion-dollar company. In 1991, Huizenga decided to sell Blockbuster to Viacom Inc. Soon after in 1994 and for over $8 billion to help finance, Viacom Inc. and Blockbuster Entertainment Corp. agreed to merge as part of a last minute joint effort to inhibit a marriage between QVC (Quality Value Convenience) TV Network and Paramount Communications Inc. in their bidding war.

Blockbuster's stock trade had been dropping steadily the months before the merger, with a small rise after the deal was announced, and three years later, in 1997, its worth was estimated to just $4.6 billion.

The Blockbuster Block Party aimed at adults, was test-marketed in two U.S. cities in 1994. The Block party consisted of Pool Tables, a large jungle gym with a ball pit, an arcade, laser tag, but ultimately Blockbuster killed the idea and the concept was bought by Paramount and renamed "Paradise Island".

In 1996 Blockbuster Video Inc., was merged into the parent company Blockbuster Entertainment Inc. which had earlier replaced the Blockbuster Entertainment Company. Later that year, Blockbuster Entertainment Inc. merged into a new Blockbuster Entertainment Corporation and the retail stores, formerly known as Blockbuster Video, were renamed Blockbuster. Earlier before selling the company, Huizenga moved Blockbuster's headquarters for a few years to [[Fort Lauderdale]], Fla., until it moved back to [[Dallas]], [[Texas]] in 1996.

 

 

The original Blockbuster company, Blockbuster Video Inc., was merged into the parent company Blockbuster Entertainment Inc. which had earlier replaced the Blockbuster Entertainment Company. In 1996, Blockbuster Entertainment Inc. merged into a new Blockbuster Entertainment Corporation and the retail stores, then called Blockbuster Video, were renamed Blockbuster. The logo changed slightly, but retained the International Typeface Corporation(ITC Machine) font.  In November 1996 Blockbuster confirmed that it was moving its headquarters from [[Fort Lauderdale]], [[Florida]] to the Renaissance Tower in downtown [[Dallas]], [[Texas]]. Most of the workers at the Florida headquarters did not want to relocate, so Blockbuster planned to hire around 500 to 600 new employees for its Dallas headquarters. The company had offered various relocation packages to all of its Fort Lauderdale staff. The second Blockbuster Entertainment Corporation was later merged into Blockbuster, Inc.

===1998-2007: John Antioco era===

===1998-2007: John Antioco era===

In 1998, Blockbuster created DEJ Productions, which acquired 225 films primarily to provide exclusive content to its Blockbuster stores prior to being sold off to First Look Studios in 2005. During that same year, Blockbuster bought the Irish video rental store Xtra-vision, with over 200 stores in Ireland and the UK. In 2009, Blockbuster sold off its Irish operations to Birchall Investments, with the few Xtra-vision stores in the UK being re-branded as Blockbuster.

In 1998 DEJ Productions was founded by Dean Wilson, Ed Stead and John Antioco. DEJ was named after the first initials of three top Blockbuster executives at the time, which acquired 225 films primarily to provide exclusive content to its Blockbuster stores before selling it off to First Look Studios in 2005. During that same year, Blockbuster acquired the Republic of Ireland and Northern Ireland video rental stores called Xtra-vision, with over 200 stores in Ireland and in the UK. In Ireland, but not in the U.K, the Blockbuster name was not used as market research showed that the Xtra-vision name was better known and more respected than Blockbuster there.

In 1998, when DVDs were emerging as the new video medium, Warner Bros. offered CEO John Antioco an exclusive rental deal. Blockbuster was to have rights to rent new DVD releases for a period of time before they went on sale to the general public. The studio was to receive 40% of rental revenues in return, which was the same deal already in place for VHS rentals. Blockbuster turned the offer down, and the studio responded by lowering its DVD wholesale price in order to compete with the rental industry. [[Walmart]] seized the opportunity and in a few years surpassed Blockbuster as the studios' single largest source of revenue. Other mass retailers soon followed suit. Many began selling DVDs below wholesale price in hopes of selling more items with better profit margins as a result of the additional foot traffic in their stores. Unable to match prices, Blockbuster's business model was severely impacted.

In 1998, [[Warner Bros.]] chief of the Home video division, Warren Lieberfarb, offered Blockbuster CEO John Antioco an exclusive proposal rental deal when DVD's were on the rise as the newer rental model, giving VHS a back seat.  

Lieberfarb offered the creation of a rental window for DVDs, during which new release movies on DVD, not VHS would not be available for purchase immediately, but only available for rental.

The enormous opportunity on the table was declined by Blockbuster. Retail Giant [[Walmart]] was offered a sell-through, not rental opportunity shortly thereafter selling the new release DVDs first and soon Wal-Mart replaced Blockbuster by the year 2003 as the [[Warner Bros.]] Studios single largest source of revenue with other retailers like [[Kmart]], Target etc. soon following the money making model of new releases. Notably Blockbuster's business model was severely impacted due to not taking this deal with the Warner Bros. studio.

In late 1998, Blockbuster launched a loyalty program called Blockbuster Rewards that allowed customers to earn free rentals, including one older title each month from the category of Blockbuster Favorites. After the 1998 test launch, the chain went nationwide with the program in 1999.

An optional, paid membership for one low annual fee brings Blockbuster members valuable benefits for an entire year, starting nationwide in 1999 after a test in 1998. A loyalty program rewarding Blockbuster's most loyal VIP rewards members officially called "Blockbuster Rewards" allowed customers to earn free rentals, but not all new releases. The reward program included one older video library title each month from the category renamed and known as Blockbuster Favorites.

In August the same year, Viacom sold the Blockbuster Music chain to Wherehouse Entertainment, which was subsequently purchased by Trans World Entertainment in 2003.

Viacom sold the lackluster Blockbuster Music chain to Torrance [[California]]-based Wherehouse Entertainment Inc. for $115 million dollars in the late Summer of 1998, which was subsequently purchased by Trans World Entertainment in 2003.

In mid-2000, the company partnered with [[Enron]] in an attempt to create a video-on-demand service. The agreement was supposed to last for 20 years; however, Enron terminated the deal in March 2001 over fears that Blockbuster would not be able to provide sufficient films for the service. Also in 2000, Blockbuster turned down a chance to purchase the fledgling [[Netflix]] for $50 million. Even Blockbuster's late fees came back to bite the chain in an unlikely way. In 1997, a man named Reed Hastings returned a late copy of ''[[Apollo 13 (film)'' to his local Blockbuster. He was assessed a $40 fee. Two years later, he founded Netflix. Blockbuster was caught flat-footed by many of these changes. It could have purchased Netflix for $50 million in 2000, but passed. As Netflix rose, Blockbuster's attempts to compete on Netflix's terms—especially through the mail—foundered. It also tried to compete with Redbox using standalone kiosk's. That didn't work, either.

In the Summer of 2000, a contract for a 20-year deal between [[Enron]] and Blockbuster was made as an exclusive deal that aimed to sell movie-on-demand services, including 500 titles, on its Eron's broadband/fiber-optics network by the year's end. Less than a year later in March 2001, Enron terminated the deal, but publicly relaying information that executives at both companies said they would pursue video-on-demand services on their own or with other partners. Also in the same year 2000, Reed Hastings approached the Blockbuster CEO John Antioco and asked for $50 million to take the company he founded, Netflix. Blockbuster made one of it's well known biggest mistakes by not agreeing to buy [[Netflix]].

In 2002, Blockbuster acquired Movie Trading Company, a Dallas chain that buys, sells, and trades movies and games, to study potential business models for DVD and game trading. Also that year, it acquired Gamestation, a 64-store UK computer and console games retailer chain, and purchased DVD Rental Central for $1 million, an Arizona father-and-son online DVD-rental company with about ten thousand subscribers. DVD Rental Central would eventually become Blockbuster Online.

In 2002, Blockbuster made several purchases, including Dallas based Movie Trading Company and U.K.-based Gamestation.

On or around October 14, 2004, Blockbuster was spun-off from Viacom. Online DVD subscription was introduced on Blockbuster.com, also known as Blockbuster Online. Blockbuster also rolled out its "Game Rush" store-in-store concept to approximately 450 domestic company-operated stores. Blockbuster began game and DVD trading in selected U.S. stores.

In late 2004, Viacom Inc. announced the structure of the planned spin-off of its Blockbuster Inc. video retailer subsidiary. Additionally Blockbuster launched an online DVD rental service aimed directly at undercutting competition from Netflix. The DVD subscription was introduced on Blockbuster.com, also known as Blockbuster Online while also rolling out its in store "Game Rush".

At its peak in 2004, Blockbuster had more than 9,000 stores in the U.S. In December 2004, Blockbuster announced its intention to pursue a hostile takeover of Hollywood Video, its major U.S. competitor. After several extensions of the tender offer, Blockbuster withdrew due to [[Federal Trade Commission|FTC]] opposition. To counter the Blockbuster offer, Hollywood Video agreed to a buyout in January 2005 by a smaller competitor, the Dothan, Alabama-based Movie Gallery. Since then, Movie Gallery has filed for bankruptcy twice and its entire chain of stores has been liquidated.

At its peak in 2004, Blockbuster had had 60,000 employees more than 9,000 stores in the [[America]] alone.

In May 2005, financier [[Carl Icahn]] waged a successful proxy fight to add himself and two other members to the board. Icahn accused Blockbuster of overpaying chairman and CEO John F. Antioco, who had served in that capacity since 1997, receiving $51.6 million in compensation for 2004. Icahn was also at odds with Antioco on how to revive profit at Blockbuster. Antioco scrapped late fees in January, started an internet service, and decided to keep the company independent, while Icahn wanted to sell out to a [[private equity]] firm. Also in 2005, Blockbuster began a campaign promoting its "No more late fees" policy . The campaign proved controversial, with [[Associated Press]] reporting that the new policy actually charged users the full price of the movie or game after eight days which they could cancel by returning the product in question and paying a fee. More than 40 states filed suit against the company for false advertising. Blockbuster later settled the suit by agreeing to refunds, as well as promising to better explain the policy.

In May 2005, activist investor [[Carl Icahn]] waged a successful proxy fight to add himself and two other members to Blockbuster's board. Icahn would accuse Blockbuster of overpaying chairman and CEO John F. Antioco, who had served in that capacity for 8 years (since 1997), receiving $51.6 million in compensation for 2004. Icahn was also at odds with Antioco on how to revive and keep the Blockbuster brand relevant. This pushed John F. Antioco to scrap late fees, start an internet service, while Icahn wanted to sell out to a [[private equity]] firm. Also in 2005, Blockbuster began a campaign promoting its "No more late fees" policy. The retailer Vintage Stock acquired the Movie Trading Company name from Blockbuster in 2006.

Vintage Stock (retailer) acquired the Movie Trading Company name from Blockbuster in 2006, and continues to use the name for Dallas-area stores.

During a Superbowl commercial a billion-dollar campaign called "Blockbuster Total Access" was introduced in 2007 as a strategy against competitor companies, namely Netflix. Blockbuster customers could get DVDs from Blockbuster through the mail, but with Blockbuster, have the option of using brick-and-mortar stores, as well.

A billion-dollar campaign called Total Access was introduced in 2007 as a strategy against Netflix. Through Blockbuster Online customers could rent a DVD online and receive a new movie for free when they returned it to a Blockbuster store. While it was a major success every free movie cost the company two dollars, but the hope was that it would attract enough new subscribers to cover the loss. Netflix felt threatened, and Hastings approached Antioco with a suggestion to buy Blockbuster's online business. In return, a new system would be introduced where customers could return their movies to a Blockbuster store. Before the deal could be realized, board member Carl Icahn intervened, refusing to let the company lose more money through Total Access. Antioco was pushed out in July and replaced with James Keyes, who rejected Hasting's proposal, raised the price of online DVD rentals and put an end to the free movie deal. As a consequence, Blockbuster Online's previously massive growth quickly stopped. Antioco's departure reportedly also involved continued controversy over his compensation. He left with a $24.7 million severance package.

Through Blockbuster Online customers could rent a DVD online and receive a new movie for free when they returned it to a Blockbuster store. While it was a major success every free movie cost the company two dollars, but the goal was to entice enough new subscribers to cover the loss. Netflix felt threatened, and Hastings approached Antioco with a suggestion to buy Blockbuster's online business. In return, a new system would be introduced where customers could return their movies to a Blockbuster store. Before the deal could be realized, board member Carl Icahn intervened, refusing to let the company lose more money through Total Access. Antioco was pushed out in July and replaced with James Keyes, who rejected Hasting's proposal, raised the price of online DVD rentals and put an end to the free movie deal. As a consequence, Blockbuster Online's previously massive growth quickly stopped. Antioco's departure reportedly also involved continued controversy over his compensation. He left with a $24.7 million severance package.

On June 19, 2007, after a pilot program launched in late 2006, Blockbuster announced that it had chosen [[Blu-ray]] over HD DVD format to rent in a majority of its stores. In the pilot program, Blockbuster offered selected titles for rental and sale in 250 stores. Blockbuster stocked Blu-ray titles in almost 5,000 stores across the United States, Canada, the United Kingdom, Mexico, and Australia.

Blockbuster Online Rentals at the Time of Cancellation or Termination from their website read as follows:

The rental period for BLOCKBUSTER Online Rentals is the Membership Term remaining as of the date of rental. All outstanding rentals must be received by Blockbuster no later than 10 days past the end of the Membership Term.

If an outstanding BLOCKBUSTER Online Rental is not received by Blockbuster on or before 10 days after the expiration of the Membership Term (the “Sale Date”), the BLOCKBUSTER Online Rental will be automatically sold to you and Blockbuster will charge your Payment Method for the applicable disc(s) the AutoSale price (as hereinafter defined) of the product on the Sale Date. The “AutoSale price“ for all movie and television show discs shall be $19.99 plus applicable tax.

===2007–2011: James Keyes era===

===2007–2011: James Keyes era===

On July 2, 2007, the company named James W. Keyes, former president and CEO of 7-Eleven, as the new chairman and CEO. He introduced a new business strategy that included enhancements to existing stores along with a shift to streaming video with the acquisition of MovieLink in September 2008. Part of the plan was to de-emphasize the unprofitable Total Access (DVD-by-mail) service, in favor of online streaming. In December 2008, he still ignored both Netflix and Redbox, focusing on Apple and Walmart instead; "Neither RedBox nor Netflix are even on the radar screen in terms of competition. It's more Walmart and Apple."

On July 2, 2007, the company named James W. Keyes, as its newest chairman and CEO. Keyes was the former president and CEO of 7-Eleven. as the new chairman and CEO. James Keyes set out to raise money for the marketing and store improvements that Blockbuster so desperately needed when he took over. Additionally there was now for Blockbuster to focus on a shift to streaming video with the acquisition of MovieLink in September 2008.  

On September 14, 2007, Blockbuster GB Ltd bought a number of retail stores from ChoicesUK plc. ChoicesUK is an AIM-listed multi-channel distributor and retailer of DVDs, computer games, and CDs. The sale secured employment for approximately 450 employees across 59 stores in the UK. As part of the transaction, Blockbuster GB rebranded the stores as Blockbuster.

On February 17, 2008, Blockbuster proposed a buyout of struggling Circuit City Stores. However, after a [[due diligence]] review of Circuit City's financial books, Blockbuster withdrew its offer in July 2008. Analysts were not favorable to the proposed deal, viewing it as a desperate effort to save two struggling retailers rather than a bold turnaround initiative. Subsequently, Circuit City filed for bankruptcy on November 10, 2008 and, after liquidating all of its stores, ceased operations on March 8, 2009.

Early in 2008, News of Blockbuster's bid for Circuit City, valued at up to $1.35 billion surfaced. After a thorough review of Circuit City's financial books, Blockbuster withdrew its offer in July 2008.  

At the beginning of 2010, Blockbuster had over 6,500 stores, of which 4,000 were in the U.S.— a number that fell to 3,425 in late October the same year. In the United States it planned to close between 810 and 960 retail stores, and instead launch as many as 10,000 "Blockbuster Express" video rental kiosks by the middle of 2010. It has been claimed that more than 43 million U.S. households had Blockbuster memberships.

At the beginning of 2010, Blockbuster had over 6,500 stores, of which 4,000 were in the U.S.— a number that fell to 3,425 in late October the same year after Blockbuster announced that it would cease all its operations in Portugal, closing down 17 stores, it started becoming a downfall into a number of stores closing as a trend.  

On February 10, 2010, Blockbuster announced that it would cease all its operations in Portugal, closing down 17 outlets and leaving over 100 workers unemployed. Blockbuster representatives in Portugal blamed internet piracy and the lack of government response to it as the key factors to the company's failure in the country.

Carl Icahn officially resigned from Blockbuster's board of directors selling nearly all his remaining Blockbuster stock.

 

In March 2010, Blockbuster began "Additional Daily Rates", or "ADRs", for rentals not returned by their due date in the United States, having already used this procedure in other countries such as the UK for many years. An ADR was charged for each day a member kept the rental beyond the rental terms.  

On March 12, 2010, PricewaterhouseCoopers, Blockbuster's independent registered public accounting firm, issued its audit opinion disclosing substantial doubt about Blockbuster's ability to continue as a going concern. This report was included in Blockbusters's 10-K SEC filing. On March 17, 2010, Blockbuster issued a bankruptcy warning after continued drops in revenue threatened its ability to service its nearly $1 billion debt load. By April 1, 2010, Carl Icahn had resigned from Blockbuster's board of directors and sold nearly all his remaining Blockbuster stock. Blockbuster paired up with Time Warner to have Warner Bros. movies made available in Blockbuster stores on the DVD release date and not be subject to a four-week delay. Similar agreements were also made with Universal Studios and 20th Century Fox.

The liquidation of Movie Gallery began in May 2010, eliminating Blockbuster's primary competitor. During the same month a dissident shareholder, Gregory S. Meyer, in an effort to be elected to Blockbuster's board of directors, engaged in a proxy battle with Blockbuster's board, alleging that the board had been responsible for significant destruction of value to shareholders. Meyer was elected to the board at Blockbuster's shareholder meeting in Dallas on June 24, 2010.

The liquidation of Movie Gallery began in May 2010, eliminating Blockbuster's primary competitor. During the same month a dissident shareholder, Gregory S. Meyer, in an effort to be elected to Blockbuster's board of directors, engaged in a proxy battle with Blockbuster's board, alleging that the board had been responsible for significant destruction of value to shareholders. Meyer was elected to the board at Blockbuster's shareholder meeting in Dallas on June 24, 2010.

On July 1, 2010, the company was delisted from the [[New York Stock Exchange]] after its shareholders failed to pass a [[reverse stock split]] plan aimed at heading off involuntary delisting because of the stock's trading at well below $1 per share. The stock was then traded on the OTC Bulletin Board (over-the-counter bulletin board).

On July 1, 2010, the company was delisted from the [[New York Stock Exchange]]. The suspension and delisting of Blockbuster shares came after a failed attempt to get shareholders to agree to a reverse stock split because of the stock's trading at well below $1 per share. Ultimately the stock was then traded on the OTC Bulletin Board (over-the-counter bulletin board).

 

Blockbuster was unable to make a $42.4 million interest payment to bondholders and was given until August 13, 2010, to pay off the debt. The company hired Jeff Stegenga to be its chief restructuring officer (CRO) in an effort to satisfy bondholder demands and recapitalize the company. After failing to pay on August 13, bondholders gave Blockbuster until September 30, 2010.

On August 26, 2010, news media reported that Blockbuster was planning to file a pre-packaged Chapter 11 bankruptcy in mid-September. In light of this news, the company's chief financial officer (CFO), Tom Casey, resigned on September 11. He was replaced by Dennis McGill, formerly CFO of Safety-Kleen Systems, Inc. On September 23, 2010, Blockbuster filed for Chapter 11 bankruptcy protection due to challenging losses, $900 million in debt, and strong competition from [[Netflix]], [[Redbox]], and video on-demand services. Movie Gallery/Hollywood Video had filed for Chapter 7, Title 11, United States Code bankruptcy liquidation earlier in 2010 for similar reasons.

Unable to make a $42 million interest payment to bondholders, Blockbuster was given until August 13, 2010, to pay off the debt.

At the time of its Chapter 11 filing, Blockbuster said it would keep its 3,300 stores open; however, that December it announced it would close an additional 182 stores by the end of April 2011 in attempts to emerge from bankruptcy. It was reported in February 2011 that Blockbuster and its creditors had not come up with a Chapter 11 exit plan and that the company would be sold for $300 million or more, along with taking over debts and leases. Blockbuster admitted that it might not be able to meet financial obligations required under its Chapter 11 filing, a circumstance which could mandate conversion of the bankruptcy filing to Chapter 7 (liquidation). On March 1, 2011, the U.S. Department of Justice filed a claim disclosing that Blockbuster did not have the funds to continue reorganizing and should liquidate.

On September 23, 2010, Blockbuster filed for Chapter 11 bankruptcy protection seeking to shed its onerous debt and due to challenging losses, $900 million in debt, and strong competition.

On March 28, 2011, South Korean telecommunications company SK Telecom made a surprise bid to buy Blockbuster. Dish Network had also expressed interest in bidding, as did Carl Icahn, despite calling Blockbuster "the worst investment I ever made". Dish eventually won the auction on April 6, 2011, agreeing to buy Blockbuster for $320 million and the assumption of $87 million in liabilities and other obligations. On April 19, 2011, it was announced that Dish would keep only 500 Blockbuster stores open. The acquisition was completed on April 26, 2011. In April 2011, Dish Network told the U.S. Bankruptcy Court that it needed more time to negotiate with landlords in an effort to keep more than 600 Blockbuster stores open.

At the time of its Chapter 11 filing, Blockbuster said it would keep its 3,300 stores open; however, that December it announced it would close almost 200 more stores by the end of April 2011 in attempts to emerge from bankruptcy.

In April 2011, Blockbuster's landlords objected to its assumption of leases that it sought to assign to soon-to-be-owner Dish Network Corp., claiming that they did not have adequate assurance that the new owner would honor those leases. Blockbuster signed a deal with ITV Studios Global Entertainment to launch ITV Programmes released on DVDs, Blu-rays, etc.

In 2001 Dish Network eventually won an auction, agreeing to buy Blockbuster for $320 million and the assumption of $87 million in liabilities and other obligations. Ultimately that year Dish announce it was keeping only 500 Blockbuster stores open. Later Dish Network would tell the U.S. Bankruptcy Court that it needed additional time to negotiate with landlords in an effort to keep more than 600 Blockbuster stores open. Blockbuster's landlords objected to its assumption of leases.

===2011–2015: Michael Kelly era===

===2011–2015: Michael Kelly era===

On May 6, 2011, Keyes resigned as Blockbuster's CEO, being replaced by Michael Kelly under the new title of president. On August 31, 2011, the liquidators announced the closure of the remaining 253 Canadian stores and shutting of the entire Canadian unit.

On May 6, 2011, Keyes resigned as Blockbuster's CEO. Blockbuster announced Bankruptcy and was officially sold to cable provider Dish Network for re-construction, moving to Englewood, Colorado and bringing in Michael Kelly, a Dish executive, as Blockbuster's President. It's corporate name was then renamed Blockbuster LLC.  

In September 2011, it was announced that Blockbuster and Dish Network would launch a new service called Blockbuster Movie Pass that would compete with Netflix. For US$10 per month the members would have access to both a streaming service and movies and games-by-mail. The package was only available for subscribers of Dish Network's pay-TV service, and it eventually folded.

In September 2011, it was announced that Blockbuster and Dish Network would launch a new service called Blockbuster Movie Pass at US$10 per month. With the Movie pass the members would have access to both a streaming service, movies and games-by-mail. The package was only available for subscribers of Dish Network's pay-TV service, and it eventually folded.

On January 13, 2012, Dish CEO Aaron Kask announced that while Dish had planned to keep 90% of the stores in operation, meaning around 15,000 employees would remain employed, because of market factors "there are ones that aren't going to make it. We will close unprofitable stores. We will close additional stores." Kask did not say when these additional closings would happen and only remarked that some stores were unprofitable. The Dish chief would not say which stores the company was planning to close, but that each potential closing was to be assessed on a "case by case basis".

On January 13, 2012, Dish CEO Aaron Kask announced that while Dish had planned to keep 90% of the stores in operation, meaning around 15,000 employees would remain employed, because of market factors "there are ones that aren't going to make it. We will close unprofitable stores. We will close additional stores." Kask did not say when these additional closings would happen and only remarked that some stores were unprofitable. The Dish chief would not say which stores the company was planning to close, but that each potential closing was to be assessed on a "case by case basis".

===Canada===

===Canada===

[[Image:Flag of Canada.svg|left|75px]]

[[Image:Flag of Canada.svg|left|75px]]

In Canada, Blockbuster Canada (established in 1990) had operated independently, and it initially remained financially stable.  It began a partnership with Wind Mobile in December 2009, selling mobile phones at all stores in cities where Wind's service was available.  Phone sales began in [[Toronto]] and [[Calgary]], later expanding to other cities with Wind coverage.  Some stores even featured a full Wind "store-in-a-store" for postpaid activation's and a larger selection of devices. However, on May 3, 2011, it was announced that the company had gone into receivership. On May 25, 2011, it was announced that 146 stores, accounting for approximately 35% of the company's stores in Canada, would be shut down effective June 18, 2011. On August 31, 2011, Blockbuster Canada announced that no buyer could be found for its remaining stores that were acceptable to the court-appointed bankruptcy receiver, and that it would wind down operations and close all stores by December 31, 2011. The company had acted as a guarantor towards Blockbuster's remaining debt.

In Canada, Blockbuster Canada (established in 1990) had operated independently, and it initially remained financially stable.  It began a partnership with Wind Mobile in December 2009, selling mobile phones at all stores in cities where Wind's service was available.  Phone sales began in [[Toronto]] and [[Calgary]], later expanding to other cities with Wind coverage.  In late 2007 Blockbuster Canada came out with a new program that rewarded customers for their in-store movie purchases with e-coupons. The loyalty program, called Movie Buyers Bonus was free to join while Blockbuster had 447 stores in Canada at the time.  

 

On May 25, 2011, it was announced that 146 stores, accounting for approximately 35% of the company's stores in Canada, would be shut down effective June 18, 2011. On August 31, 2011, when no buyer could be found for its remaining stores the liquidators announced the closure of the remaining 253 Canadian stores and shutting of the entire Canadian unit.

===Denmark===

===Denmark===

===United Kingdom===

===United Kingdom===

[[Image:Union jack.jpg|left|75px]]

[[Image:Union jack.jpg|left|75px]]

In 1989, the company entered the United Kingdom via its purchase of the 875-store Ritz Video chain for $135 million, from parent company Citivision. Ritz Video was Europe's  

In the late 80's and into the 1990's Blockbuster expanded in the Brittan (United Kingdom), acquiring Europe's largest rental firm Ritz Video for $135 million. The stores were re-branded to Blockbuster, making it the largest British rental chain after the 875-store changeover to Blockbuster. By 2013, Blockbuster reached it's peal there with 528 locations in the United Kingdom.

largest rental chain, with a 20% share of the United Kingdom video market, and annual sales of about $150 million. The first re-branded Blockbuster outlet opened on

Walworth Road, South London, the same year. By November 1991, Blockbuster UK converted 30 stores to its brand.

 

Blockbuster UK operated trade functions in all their stores, buying and selling pre-owned DVDs, console games, and gaming accessories. Stores offered either store credit or cash for trade-ins, and would price-match with competitors. At its height in 2002, Blockbuster UK operated out of over 800 stores.

 

In early 2013, the company had 528 locations in the United Kingdom. On January 16, 2013, Blockbuster placed its United Kingdom subsidiaries in Administration (law), putting over 4,000 jobs at risk. Non-UK stores were unaffected by the administration, and continued to trade as normal. On February 1, 2013, a large number of Blockbuster stores in the UK were closed, and the UK business was purchased out of administration by restructuring firm Gordon Brothers Group (Europe) on March 23, 2013.

 

Blockbuster UK then traded as TS Operations, with only 264 branches retained. On October 29, 2013, Blockbuster UK announced it was to go into administration for a second time. On November 14, 2013, 72 store closures were announced, A week later, with no success in finding a buyer, it was announced by Moorfields Corporate Recovery that all remaining stores in the country would cease operation on December 16, 2013, with stock to be cleared the day before this.

 

In September 2018, to coincide with the digital release of ''Deadpool 2'', a pop-up retail store in the style of an original 1989 Blockbuster outlet was opened for two days in Shoreditch in East London. The store gave away 1,989 copies of the film in reference to Blockbuster's entry year into the British market.

==Online rentals==

==Online rentals==

==External links==

==External links==

*[http://www.blockbuster.com/# official website]

*[http://www.blockbuster.com/# official website]

*[https://www.wsj.com/articles/SB1019676329683925720 Wall Street Journal - ests Plan to Offer Unlimited Rentals for Fixed Fee]

*[https://www.wsj.com/articles/SB1019676329683925720 Wall Street Journal - ests Plan to Offer Unlimited Rentals for Fixed Fee]

*[https://www.sec.gov/Archives/edgar/data/1085734/000119312505063510/d10k.htm United States Securities and Exchange Commision BlockBuster Inc. for the fiscal year end 2004]

*[https://www.sec.gov/Archives/edgar/data/1085734/000119312505063510/d10k.htm United States Securities and Exchange Commision BlockBuster Inc. for the fiscal year end 2004]

*[https://grantland.com/hollywood-prospectus/blockbuster-video-1985-2013/ Blockbuster bowl and Wayne H. buying up Video chains in Vegas and St.Louis]

*[https://grantland.com/hollywood-prospectus/blockbuster-video-1985-2013/ Blockbuster bowl and Wayne H. buying up Video chains in Vegas and St.Louis]

*[https://campingworldbowl.com/history/ Camping World Bowl History of the Orgignal Sunshine classic college football]

*[https://campingworldbowl.com/history/ Camping World Bowl History of the Orgignal Sunshine classic college football]

[[Category:Media]]

[[Category:Media]]