Blockbuster

Group 2

Blockbuster is Fighting for survival

Blockbuster is the world’s largest video rental. But, video and dvd rental sales have decreased markedly, because Blockbuster offered a limited selection of titles, short hours, and minimal customer service. To survive Blockbuster needs a new strategy. The new strategy is Cook provided an environment where customers could browse through thousands of titles including classics, foreign films, musicals, westerns, dramas, and animated films. Blockbuster expanded rapidly and broadly through acquisition and by opening new stores. Eventually, almost 50 percent of its stores were franchised.

Blockbuster had tremendous success, but changes in the entertainment industry and new technology led to increased competition. Products as TiVo and Reply TV made recording and watching your own choice of movies at home an attractive option for consumers. Firms like Netflix also created strong competition. Netflix doesn’t charge late fees but rather has monthly subscriber fee and costumers can check out as many movies as they want. To counter Netflix, Blockbuster started its own online service and a flat-fee subscription service.

Blockbuster is currently in significant trouble. Netflix’s stock price hovers around $70 per share and Blockbuster’s is 30 cents per share. Blockbuster lost a total of $932 million in 2008 and 2009 and continued to lose money subsequently. Many analysts predict it will have to file for bankruptcy in the near future.

The company has made several moves to respond to competition in an attempt to recapture lost market share. For example, it signed an agreement with TiVo to bring its online. Blockbuster has signed an agreement with major movie studios for access to popular movies for in-store and online rentals. Finally, Blockbuster is offering to rent movies on SD cards. To compete with the popular RedBox movie kiosks.

Several competitors designed better systems, some using unique and new technology to better...