Netflix vs Blockbuster

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Date Submitted: 03/11/2011 12:52 PM

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After selling his first company Pure Software Reed Hasting founded this completely new business. Hasting sensed the opportunity for online movie rentals business and founded the company Netflix in 1997. Netflix launched its online subscription service in 1999. Netflix was successful in acquiring about 2million customers in four years. Netflix found that a lot of new customers are attracted towards its online movie rental service because of the information provided by Netflix about each movie in Netflix’s rental library which included critic reviews, member reviews, online trailers and ratings, and the ease with which they could find and order movies; the elimination of late fees and due dates; and convenience of being provided the postage return envelope for mailing the DVD back to Netflix.

The company ran a marvelous advertising and marketing campaign from 2001 to 2008.For this reason, company achieved a high level of consumer awareness of Netflix name, its logo, and its movie rental service. Netflix had 2007 revenues of $1.2 billion (up from $501 million in 2004) and its 100,000 movie titles (up from 55,000 in 2005).By July 2008 Netflix had 8.4 million subscribers.

Block Buster:

Blockbuster was founded in Dallas Texas in 1985. Blockbuster had followed an extensive growth strategy, and achieving a peak of 9,094 companies operated and franchised movie stores worldwide by the year-end 2004. Blockbuster had 3,291 international store locations at the year end 2004 were all over among almost 24 countries, but 87% of their stores were in following countries: Great Britain (897), Canada (426), Australia (408), Mexico (317), Italy (241), Ireland (199), Brazil (131), Taiwan (128) and Spain (106).

During 2005 and 2007 due to amid adverse market and competitive conditions and high losses Blockbuster closed 700 company operated sites in United States and 500 of its company operated sites outside United States. The total numbers of franchised...