Blockbuster Is Blockbusted

BLOCKBUSTED

Prepared for:

Mr. Michael Fitch

GBA-321 Essential Business Skills

Saint Leo University

Prepared by:

Michele Naughton

April 15, 2012

Blockbuster Video was a leading organization in the late 20th century. The company offered home video rental and video game rental to millions of customers at reasonable prices. The company’s founder, David Cook, opened the large scale video rental business in 1985 in Dallas, Texas. The selection was unremarkable. For nearly 15 years, Blockbuster turned profits in the millions. At the beginning of the 21st century, there was a decline in Blockbusters net value. There were several reasons for the decline of Blockbuster Video. They included poor decision making, advancing technology and aggressive competitors. As the home entertainment mogul struggles to stay afloat, the stock plunges, sales declined and customers bailed. The one time leader in home video entertainment struggled with declining profits, store closing and bankruptcy. Despite Blockbuster’s desperate attempts to alter business tactics and compete within the market, they were unable to succeed. Throughout the last decade, Blockbuster Video lost millions of dollars and continued to fall short of the reputation it once held in the 1990’s.

DECLINE OF BLOCKBUSTER

The beginning of Blockbuster Video’s fall occurred in 1997 when a man named “Reed Hastings returns Appolo 13 to blockbuster six weeks overdue, and is dismayed by the $40 late fee.” (Carr) In “1998: Hastings founds Netflix.” (Carr) Hastings development of Netflix helped re-invent the movie rental video system along while embracing advancing technology. “Netflix was originally a single rental service, but the subscription model was one of a few ideas we had--so there was no Aha! moment. Having unlimited due dates and no late fees has worked in a powerful way and now seems obvious, but at that time we had no idea if consumers...