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Blockbuster (movie rental store)
Encyclopedia
Blockbuster LLC is an American-based provider of home video
and video game rental services, originally through video rental shops (both owned and franchised
), later adding DVD-by-mail, streaming
video on demand
, and kiosks
. At its peak in 2009, Blockbuster had up to 60,000 employees. There are around 1700 Blockbuster stores in the U.S. with locations in 17 countries worldwide. It is headquartered in McKinney
, Texas
. Because of competition from other video rental companies such as Netflix
, Blockbuster has undergone significant revenue losses. The company filed for bankruptcy
on September 23, 2010, and on April 6, 2011, was won by satellite television provider Dish Network
at auction for $233 million and the assumption of $87 million in liabilities and other obligations. The acquisition was completed on April 26, 2011.
at the corner of Skillman and Northwest Highway. The founder of the company was David Cook, who grew the business and brought it public. The innovation was derived from Cook's experience with managing huge databases. After the first few stores opened, he built a $6 million warehouse in Garland, TX, that could pull and package multiple stores in a day. Key to the early success of Blockbuster was their ability to customize a store to its neighborhood, loading it up with films geared specifically to demographic profiles in addition to the popular new releases, and a sizable collection of catalog titles. The logo was created by Lee Dean, working for the now defunct Rominger Advertising agency.
In 1987, the company won a court case against Nintendo
of America, Inc, which paved the way for the rental of videogames.
Scott Beck, a young businessman in Dallas, approached John Melk, prior executive with Waste Management
, about buying a franchise. Melk brought the idea to his friend and business associate, Wayne Huizenga
, who agreed to buy the company after overcoming initial concerns about the video industry.
Huizenga and Melk used similar techniques in growing Waste Management, and soon, they were opening one store every seventeen hours. They also bought every Blockbuster franchise they could get their hands on (removing pornographic movies). At the helm, Huizenga spent the late 80s acquiring several of Blockbuster's key rivals—most notably Major Video. In 1990 Blockbuster bought Mid-Atlantic rival Erol's
with over 250 stores. The company became a multi-billion dollar company and was sold to Viacom
for a price of $8.4 billion.
The Blockbuster Block Party concept was test-marketed in Albuquerque, New Mexico
and Indianapolis, Indiana
; Block Party was an "entertainment complex" aimed at adults, containing eight themed areas housing a restaurant, games, laser tag arena and motion simulator rides and was housed in a windowless building the size of a city block. During the 1990s Blockbuster bought out their major UK rival Ritz Video and changed the name of all the stores to their own, which made them the number one video rental store in the country by a wide margin.
In 1992, Blockbuster acquired the Sound Warehouse and Music Plus music retail chains and created Blockbuster Music. In August 1998, Viacom sold the Blockbuster Music chain to Wherehouse Entertainment, who was subsequently purchased by Trans World Entertainment
in 2003.
In 1994, Blockbuster acquired a stake in Spelling Entertainment Group
, a media company run by television producer Aaron Spelling
. Viacom increased its stake in Spelling over the years, finally taking full ownership in 2000.
In 1996, Blockbuster bought the Irish video rental store xtra vision, with over 200 stores in Ireland and the UK. In 2009, Blockbuster sold off their Irish operations to Birchall Investments, with the few xtra vision stores in the UK being rebranded as Blockbuster.
In 1993, Blockbuster proposed a merger with Viacom
, however, after both companies' stocks tumbled in 1994, Viacom eventually purchased Blockbuster.
In 1996, the Blockbuster Entertainment Corporation was renamed Blockbuster, Inc. and the retail stores, then called Blockbuster Video, were renamed Blockbuster. Older stores have not changed. During that year Blockbuster, which was then headquartered in Fort Lauderdale, Florida
, began studying the idea of moving its headquarters into the Renaissance Tower in Downtown Dallas
. In November 1996 Blockbuster confirmed that it was moving into the Renaissance Tower. 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 employees. 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.."
In 2002, Blockbuster acquired Movie Trading Company, a Brooklyn chain that buys, sells, and trades movies and games, to study potential business models for DVD and game trading. Also that year, they acquired Gamestation
, a 64 store UK computer and console games retailer chain.
Blockbuster separated from Viacom in 2004 and launched Game Pass nationwide. Online DVD subscription was introduced on Blockbuster.com (aka 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 select US stores.
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 served in that capacity since 1997, and who received $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 wanted to keep the company independent, while Icahn wanted to sell out to a private equity
firm. In 2007, Antioco left the company, reportedly due to continued controversy over his compensation. He left with a $24.7 million severance package.
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 de-emphasizing the unprofitable Total Access online service, in favor of an in-store, retail-oriented model. His predecessor John F. Antioco attempted this same plan initially in 1997. Additionally, Blockbuster Inc. lifted the ban on using check cards to secure rentals of movies and games in excess of the per-visit check out limit. Customers who were once required to use a major credit card are now free to use their check card.
On September 14, 2007, Blockbuster GB Limited 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 decided to re-brand the stores as BLOCKBUSTER.
On February 17, 2008, Blockbuster proposed a buyout of struggling Circuit City. However, after a due diligence
review of Circuit City's financial books by Blockbuster (pushed for by Carl Icahn
), 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. It even earned CEO James Keyes a spot on Jim Cramer's Mad Money
Wall of Shame before the offer was withdrawn. Subsequently Circuit City filed for bankruptcy on November 10, 2008 and after liquidating all its stores ceased operations on March 8, 2009.
, closing down in the process 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 bankruptcy in the country. By March 2010, Blockbuster was in talks of selling its European operations altogether, but would not disclose the details.
On March 1, 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 "Additional Daily Rate" was charged for each day a member chooses to keep 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 dollar debt load.
By April 1, 2010, Carl Icahn
had resigned from Blockbuster's board of directors and sold nearly all his remaining Blockbuster stock.
On May 2010, Movie Gallery
began to liquidate, leaving Blockbuster as the only remaining national video rental chain in the United States. 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 has been responsible for significant destruction of value to shareholders. Mr. Meyer was elected to the board at Blockbuster's shareholder meeting in Dallas, Texas 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 due to the share price trading well below $1 per share. The stock then traded on the over-the-counter bulletin board (OTCBB).
In addition, 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 on filing 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 22, 2010, a source close to Blockbuster announced they would be filing for Chapter 11 in a few days time. It was carrying some $900 million in debt.
In Canada, Blockbuster Canada had operated independently, and it initially remained financially stable. 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 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.
Blockbuster UK, Australia and Chile are also separate entities and currently remain unaffected.
due to challenging losses, $900 million in debt, and strong competition from Netflix
, Redbox
, and video on-demand services. Blockbuster lagged behind these competitors in online rentals, Redbox-style kiosks, and streaming video. Movie Gallery/Hollywood Video
had filed for Chapter 7 bankruptcy liquidation
earlier in 2010 with a similar reason to Blockbusters'.
At the time of Chapter 11 filing, Blockbuster said they would keep their 3,300 stores up and running; however, the company was expected to close over 900 stores by the end of 2010. In December 2010, Blockbuster 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 has stated that there is the possibility that they may 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 does not have the funds to continue reorganizing and should liquidate.
In April 2011, Blockbuster's landlords objected to its assumption of leases that it seek to assign to soon-to-be-owner Dish Network
Corp., saying among other things, they did not have adequate assurance that the new owner would honor those leases.
On August 31, 2011 the liquidators announced the closure of the remaining 253 Canadian stores and wind up the entire Canadian unit.
, 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 US$320 million. On April 19, 2011, it was announced that Dish would only keep 500 Blockbuster stores open. At its peak, Blockbuster had more than 4,000 stores nationwide.
In April 2011, Dish Network
, the Dallas-based video rental chain’s new owner, told the U.S. Bankruptcy Court that it needs more time to negotiate with landlords. Also, it is trying to keep more than 600 Blockbuster stores open. The deal was finalized on April 26, 2011.
The standard business model for video rental stores was that they would pay a large flat fee per video, approximately US$65, and have 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-1990s. Blockbuster obtained videos for little cost and kept 60 percent rental fee, paying the other 40 percent to the studio, and reporting rental information through Rentrak
. What Blockbuster got out of the deal, besides a lower initial price, was that movies were not available for sale during an initial release period, at least at an affordable price point—customers either had to rent, wait, or buy the film on tape at the much higher MSRP targeted at other rental chains and film enthusiasts, at that time then between $70–100 before the end of the initial release period.
s was launched during the 2002 Super Bowl
. It starred the voices of James Belushi
and James Woods
, as a rabbit
and a guinea pig
in a pet shop, located across the road from a Blockbuster store. The first campaign ended in 2003. The Carl and Ray campaign started again in 2007 starting with a commercial in the first quarter of Super Bowl XLI
.
Blockbuster used Pre-installed software
in marketing agreements with smartphone
service providers, that cannot be removed without rooting the phone and voiding its warranty.
Representing itself as a family-friendly chain, Blockbuster never rented nor sold pornographic titles
in the US market (other markets vary), though the stores carried R-rated and unrated films, including a large number of "soft porn" titles (including Red Shoe Diaries
. Red Shoe Diaries was distributed exclusively by Blockbuster in a now expired agreement with then-sister cable network Showtime during the Viacom era). Blockbuster required employees to check ID and did not allow rental of Youth Restricted Viewing titles with a rating over R to children under 17 unless their parents have specifically allowed it through a family account.
Blockbuster was the exclusive rental chain for The Weinstein Company
movies since January 1, 2007, although due to the First Sale Doctrine, other rental stores and online DVD rental-by-mail companies, like Netflix
, could still rent DVDs released by The Weinstein Company.
rental format to rent out 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, United Kingdom, Mexico and Australia.
As of January 3, 2010, Blockbuster had over 4,000 U.S. stores, of which it planned to close between 810 and 960, while planning to open as many as 10,000 video rental kiosks by mid-2010. As of January 3, 2010, it had more than 2,500 international stores (operating under Blockbuster and other brands). It had been claimed that there are more than 43 million U.S. households with Blockbuster memberships.
The company had an Irish
subsidiary, Xtravision, which did not operate under the Blockbuster brand name. Blockbuster sold Xtravision at a loss in August 2009 to Birchhall Investments Limited.
In Australia, the company pursued a franchising model whereby its corporate stores, which peaked at 133 in 1998, were converted into franchises. The company also disbanded its chain of Game Rush video game stores, presumably as a part of the U.S. headquarters’ strategy to focus on core rental business. Metropolitan Victoria (Melbourne
) was the last remaining significant concentration of corporate stores.
In December 2004, Blockbuster announced it wanted to pursue a hostile takeover
of Hollywood Video
, its major U.S. competitor. In response, 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 the entire chain of stores was liquidated.
In February 2007, Blockbuster announced plans to sell its Australian subsidiary and franchising rights to Video Ezy
, subject to approval from the Australian Competition and Consumer Commission
. Blockbuster's Australian operations encompassed 29 company-owned stores and 341 franchises, which Video Ezy would continue to operate using the Blockbuster brand.
On June 29, 2007, The Hollywood Reporter
announced 282 US stores would close that year.
On December 18, 2007, a store in Dallas was renamed Blockbuster Media.
Blockbuster announced that it plans to shut down its stores in Peru
due to poor revenues, which it blamed on the effect of piracy
on the movie market. The company has already closed down its stores in Ecuador
, Spain
, Portugal
and El Salvador
. In March 2010, Blockbuster announced that it intended to sell all operations in Europe.
In December 2009, Blockbuster announced a partnership with Wind Mobile
. Launch day would see a roll out of 13 stores in Toronto and 3 in Calgary carrying Wind Mobile phones inside Blockbuster stores.
In March 2010, Blockbuster paired up with Time Warner Inc. to have Warner Bros.
movies be available in Blockbuster stores on the DVD release date and not be subject to a four-week delay in availability. Similar agreements were also made with Universal
and 20th Century Fox
.
Also in 2010, Blockbuster shuttered 545 operated stores in the 2010 fiscal year.
In Summer 2003, Blockbuster started converting select stores in select regions to GameRush stores. These stores sold and bought consumer DVDs, games, gaming systems, and accessories. It was offered as a direct competition to stores such as GameStop
and Game Crazy. Blockbuster used their location status to get instant coverage; it also promoted these stores by hosting video game tournaments, special trade-in offers, and a more "hip" look to the selection and staff. However, when Blockbuster introduced "The End of Late Fees" GameRush was put on the chopping block. In April 2007, GameRush stores were reduced back to just a games section.
Blockbuster UK operated Trade functions in all their stores, buying in and selling preowned consoles, DVDs games and accessories with customers, and pricematching with other high street competitors by offering either store credit against other purchases, or cash for trade ins.
. About 10,000 Blockbuster Express self-service movie rental kiosks are operational in 2011. It competes with Redbox
movie rental kiosks made by Coinstar
.
.
Blockbuster's U.S. online operation started with around 10 warehouses; further expansions every year brought that number to 41, plus 1400+ stores in the Blockbuster Online network. Most Blockbuster independent franchises did not honor the Total Access program. The company had 1.5 million subscribers at the end of the third quarter of 2006.
Blockbuster's move to follow the business pattern with its online rentals as was established by Netflix prompted Netflix to sue Blockbuster for infringement of patent. Blockbuster counter sued with a counterclaim alleging deceptive practices with its patent which it alleges was designed to maintain an illegal monopoly. The suits were eventually settled, and while the terms were not disclosed it was later reported that Netflix recorded a settlement payment from Blockbuster of $4.1 million in the second quarter of 2007.
Blockbuster offered several online movie rental plans. In select cities customers could add games to their movie rental queue as if they were included in their plan, but game rentals resulted in a separate additional fee which was not displayed or charged until the end of the billing cycle. Until July 26, 2007, Blockbuster offered and advertised unlimited free in-store exchanges of online rentals with all plans, included free of charge. Since then there were several changes back and forth with regard to this policy; as of March 2010 customers were allowed a limited number of in-store exchanges.
At the end of 2006, Blockbuster Total Access had 2.2 million customers, exceeding their original goal of 2 million, according to the official website. After an aggressive media campaign that accounted for much of Blockbuster's $46.4 million net loss in the first quarter of 2007, the Total Access subscriber base surpassed 3 million customers in total, marking the company's highest subscriber growth quarter ever. By 2009, however, the company was declining to provide figures when asked by the Wall Street Journal.
On January 5, 2007, Southern Stores Inc, one of Blockbuster's largest franchise operators in the United States, filed a lawsuit in federal court alleging that, by introducing Blockbuster Online and Blockbuster Total Access, the rental chain has undercut the group's franchise agreement.
On August 6, 2010, Blockbuster By Mail subscribers gained access to Blockbuster's library of console games, in addition to movies and television shows.
In May 2004, Blockbuster also introduced a conventional online subscription service. The unlimited three-disc plan is £14.99/month. Unlike the US service, there was no in-store disk exchange. There are a total of 600 Blockbuster stores in the U.K.
In April 2005, Blockbuster UK started trialing a combined online and in-store rental program known as 'OnlineXtra'. This entitled customers paying an extra £2 online each month to rent two additional movies in-store (sent to them via the post). This program was discontinued in 2006, with those on onlineXtra plans moved over to traditional online-only rental packages.
In early 2008, Blockbuster UK launched a new version of onlineXtra, which allowed customers to print vouchers to use in Blockbuster stores. These onlineXtra plans are still available.
2008 was a big year for Blockbuster UK; the website was completely overhauled, improving navigation and user experience. Store customers were given a full interactive section so that they could properly track what was in their local Blockbuster store, while online users were treated to a radical overhaul of the rental section on site which introduced innovative new browse pages such as Browse By Theme and Browse By Year. Upon seeing the new site, independent DVD rental comparison site Choose DVD Rental.co.uk re-reviewed the site - "The Blockbuster DVD rental site - from where you'll be making your DVD rental selections - is sporting a brand new design which... is a world away from the clumsy mess of its former incarnation which tried to balance the high-street business alongside the online DVD rental options with a mish-mash of slipshod and heavy graphics that made the site more than a little bit of a pain to use regularly.
Now with the new, easy-to-use design the rental service is simple to navigate around and offers plenty of added extra's for anyone looking for inspiration about what to rent."
"More importantly though, Blockbuster DVD rental pretty much leads the pack when it comes to customer satisfaction and title turnaround putting them at the very pinnacle of the UK's DVD rental market."
Late in 2008, following in the footsteps of the stores, Blockbuster UK added a buy online section to the site - allowing Blockbuster online members to buy new Blu-rays discs and games. This was expanded to include other categories in 2009 and 2010. In 2009, this was integrated with the store base, allowing any customer visiting a Blockbuster High Street store in the UK to access the entire range of movies and games sold online. Paying in-store for the item.
In 2009, Blockbuster expanded its range of exclusive titles both online and in-store - boasting Hollywood heavyweights like Gran Torino, Changeling, Taken and Knowing alongside more arthouse, award-winning pictures such as Che Parts 1 and 2, The Young Victoria and 50 Dead Men Walking. Blockbuster has exclusive titles available each and every month, so Blockbuster customers can enjoy top movies before the likes of other High Street brands like HMV, Play and LOVEFiLM.
In November 2009, Blockbuster UK became the only rental company to be able to rent titles from Universal Pictures online, giving them a big advantage over their competitors such as Netflix and LOVEFiLM.
In January 2010, Blockbuster UK launched an online blog, bringing together editorial content with public-facing announcements, following in the steps of its US cousin. The blog was added to the Blockbuster UK website soon after launch with readers of its This Week and Cinemascape articles redirected to the blog.
In April 2010, Blockbuster UK upgraded its website with improved search algorithms and improved product pages. It also launched Facebook, Twitter and YouTube channels. Customer responses to the blog that announced the changes were generally quite positive.
In May 2010, Blockbuster UK introduced a monthly video show called the BB Insider. It lasted for eight episodes before being discontinued and replaced with weekly video roundup in January 2011. In the same month, they announced that they were working on an iPhone App for online subscribers. Images of the app were subsequently leaked on the Blockbuster UK Facebook channel prior to the planned September 2010 launch.
In June 2010, Blockbuster UK expanded its onlineXtra program to provide additional benefits to all online subscribers, with all online rental subscribers able to rent for £1.50 in any Blockbuster store and get 10% off when they buy in the store. In February 2011, Blockbuster UK announced that they had changed their policies for online vouchers - allowing customers to show the voucher to be scanned in the store on smart phone and tablet devices.
In September 2010, Blockbuster UK launched a Click & Collect service for store customers - allowing Blockbuster High Street shoppers to reserve movies in-store via the Blockbuster website before collecting them from a Blockbuster store.
In January 2011, Blockbuster UK launched a new weekly email newsletter called Blockbuster Showcase. There are two versions sent out every Monday - one for online subscribers and one for store customers. In the same month, Blockbuster UK announced the launch of new rental pages at Blockbuster UK, with an improved Cinema experience.
In February 2011, Blockbuster UK announced price drops in all 600 Blockbuster stores in the UK along with a new Blockbuster loyalty card program. These price drops were followed by a price drop of the Blockbuster UK online pay per rent service.
In April 2011, Blockbuster UK announced the launch of 'Top Ticket', a new feature of their online rental service allowing online rental customers to 'GUARANTEE' their next movie. Available free for all Blockbuster unlimited rental subscribers, all Unlimited rental plans get at least one Top Ticket each month. This makes Blockbuster UK the first rental service to offer this type of guarantee in the world. Customer reaction was mixed, with some customers feeding back positively about the new feature, while others complaining that they still could not guarantee the movie they wanted. Top Ticket was launched as a dedicated section on the Blockbuster UK website in the same month.
In May 2011, Blockbuster UK announced a lower new release rental price of £2.99 for new release movies along with an expansion of its store games rentals, allowing new games to be rented for £5 for five nights. Blockbuster announced the end of late fees and the return of the Blockbuster Promise in a Blockbuster TV Commercial.
In July 2011, Blockbuster UK announced the launch of a new website, Blockbuster Marketplace. This site is devoted to selling second-hand DVDs, Blu-rays and games and can be found at http://market.blockbuster.co.uk
Video stores. Since they have opened many stores across the country and is now at 70 stores in total. Their stores are open 365 days a year with hours usually from pm. 10.00 to 22.00.
the largest Brazilian department store acquired half of the shares and now it is named under Americanas Express Blockbuster. The store layout is now similar to a regular American store with a Game Rush, but instead of games it offers electronics goods like computers and DVD Players, groceries like candies and microwave popcorn, and even toys from Mattel
and Hasbro
's board games. Blockbuster sold its Brazilian stake in 2007 for a steep loss.
In January 2006, Blockbuster Brazil also introduced an online rental service now featuring both DVD and Blu-ray plans. There were currently four Block plans available with prices ranging from R$34.90 to R$79.90. The 3-disc plan with unlimited exchanges was R$49.90/month. Unlike the US service, there was no in-store disk exchange.http://www.blockbuster.com.br
. According to the 8-K filing by Blockbuster, the total purchase price was $6.6 million. The exact terms of the agreement have yet to be disclosed, but it can be assumed that the deal was to include content agreements with the major studios, thus giving Blockbuster access to one of the largest libraries of downloadable movies.
of California and Eliot Spitzer
of New York argued that customers were being automatically charged the full purchase price of late rentals and a restocking fee for rentals returned after 30 days. In a settlement, Blockbuster agreed to reimburse the states the cost of their investigation, clarify communication to customers on the terms of the program and offer reimbursement to customers charged fees prior to the clarification. New Jersey filed a separate lawsuit and was not a party to the settlement.
The 2005 controversy came after a related lawsuit settled in 2002 in Texas. That lawsuit, alleging exorbitant late fees, led the company to pay $9.25 million in attorney fees and offer $450 million in late fee refund coupons (which were rent-one get-one-free coupons, and thus required the customer to make an initial expenditure). The company estimated that the coupons would ultimately cost about $45 million depending on the redemption rate; an attorney for the plaintiffs estimated the final cost at closer to $100 million at a redemption rate of about 20% (calculated based on a similar case in Michigan).
Home video
Home video is a blanket term used for pre-recorded media that is either sold or rented/hired for home cinema entertainment. The term originates from the VHS/Betamax era but has carried over into current optical disc formats like DVD and Blu-ray Disc and, to a lesser extent, into methods of digital...
and video game rental services, originally through video rental shops (both owned and franchised
Franchising
Franchising is the practice of using another firm's successful business model. The word 'franchise' is of anglo-French derivation - from franc- meaning free, and is used both as a noun and as a verb....
), later adding DVD-by-mail, streaming
Streaming media
Streaming media is multimedia that is constantly received by and presented to an end-user while being delivered by a streaming provider.The term "presented" is used in this article in a general sense that includes audio or video playback. The name refers to the delivery method of the medium rather...
video on demand
Video on demand
Video on Demand or Audio and Video On Demand are systems which allow users to select and watch/listen to video or audio content on demand...
, and kiosks
Interactive kiosk
An Interactive kiosk is a computer terminal featuring specialized hardware and software designed within a public exhibit that provides access to information and applications for communication, commerce, entertainment, and education....
. At its peak in 2009, Blockbuster had up to 60,000 employees. There are around 1700 Blockbuster stores in the U.S. with locations in 17 countries worldwide. It is headquartered in McKinney
McKinney
McKinney, Texas, is a city in and the county seat of Collin County, Texas, United States.McKinney as a surname may refer to:*Anthony McKinney, a convicted murderer in Illinois whose guilt has been questioned...
, Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
. Because of competition from other video rental companies such as Netflix
Netflix
Netflix, Inc., is an American provider of on-demand internet streaming media in the United States, Canada, and Latin America and flat rate DVD-by-mail in the United States. The company was established in 1997 and is headquartered in Los Gatos, California...
, Blockbuster has undergone significant revenue losses. The company filed for bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
on September 23, 2010, and on April 6, 2011, was won by satellite television provider Dish Network
Dish Network
Dish Network Corporation is the second largest pay TV provider in the United States, providing direct broadcast satellite service—including satellite television, audio programming, and interactive television services—to 14.337 million commercial and residential customers in the United States. Dish...
at auction for $233 million and the assumption of $87 million in liabilities and other obligations. The acquisition was completed on April 26, 2011.
History
The first Blockbuster store opened October 1985 in Dallas, TexasDallas, Texas
Dallas is the third-largest city in Texas and the ninth-largest in the United States. The Dallas-Fort Worth Metroplex is the largest metropolitan area in the South and fourth-largest metropolitan area in the United States...
at the corner of Skillman and Northwest Highway. The founder of the company was David Cook, who grew the business and brought it public. The innovation was derived from Cook's experience with managing huge databases. After the first few stores opened, he built a $6 million warehouse in Garland, TX, that could pull and package multiple stores in a day. Key to the early success of Blockbuster was their ability to customize a store to its neighborhood, loading it up with films geared specifically to demographic profiles in addition to the popular new releases, and a sizable collection of catalog titles. The logo was created by Lee Dean, working for the now defunct Rominger Advertising agency.
In 1987, the company won a court case against Nintendo
Nintendo
is a multinational corporation located in Kyoto, Japan. Founded on September 23, 1889 by Fusajiro Yamauchi, it produced handmade hanafuda cards. By 1963, the company had tried several small niche businesses, such as a cab company and a love hotel....
of America, Inc, which paved the way for the rental of videogames.
Scott Beck, a young businessman in Dallas, approached John Melk, prior executive with Waste Management
Waste Management, Inc
Waste Management, Inc. is a waste management, comprehensive waste, and environmental services company in North America. Founded in 1894, the company is headquartered in Suite 4000 at the First City Tower in Downtown Houston, Texas, in the United States....
, about buying a franchise. Melk brought the idea to his friend and business associate, Wayne Huizenga
Wayne Huizenga
Harry Wayne Huizenga is an American businessman who grew Blockbuster Video, Waste Management, Inc., and AutoNation into successful companies. He is the former owner of the National Football League's Miami Dolphins, the National Hockey League's Florida Panthers and the Major League Baseball's Miami...
, who agreed to buy the company after overcoming initial concerns about the video industry.
Huizenga and Melk used similar techniques in growing Waste Management, and soon, they were opening one store every seventeen hours. They also bought every Blockbuster franchise they could get their hands on (removing pornographic movies). At the helm, Huizenga spent the late 80s acquiring several of Blockbuster's key rivals—most notably Major Video. In 1990 Blockbuster bought Mid-Atlantic rival Erol's
Erol Onaran
Erol Onaran , founder of Erol's TV, Erol's Video and Erol's Internet, was a Turkish-American businessman. He was born in Turkey, although he spent most of his young life in Istanbul, Turkey where he goes to Istanbul Erkek Lisesi before moving to the United States in 1959...
with over 250 stores. The company became a multi-billion dollar company and was sold to Viacom
Viacom
Viacom Inc. , short for "Video & Audio Communications", is an American media conglomerate with interests primarily in, but not limited to, cinema and cable television...
for a price of $8.4 billion.
The Blockbuster Block Party concept was test-marketed in Albuquerque, New Mexico
Albuquerque, New Mexico
Albuquerque is the largest city in the state of New Mexico, United States. It is the county seat of Bernalillo County and is situated in the central part of the state, straddling the Rio Grande. The city population was 545,852 as of the 2010 Census and ranks as the 32nd-largest city in the U.S. As...
and Indianapolis, Indiana
Indianapolis, Indiana
Indianapolis is the capital of the U.S. state of Indiana, and the county seat of Marion County, Indiana. As of the 2010 United States Census, the city's population is 839,489. It is by far Indiana's largest city and, as of the 2010 U.S...
; Block Party was an "entertainment complex" aimed at adults, containing eight themed areas housing a restaurant, games, laser tag arena and motion simulator rides and was housed in a windowless building the size of a city block. During the 1990s Blockbuster bought out their major UK rival Ritz Video and changed the name of all the stores to their own, which made them the number one video rental store in the country by a wide margin.
In 1992, Blockbuster acquired the Sound Warehouse and Music Plus music retail chains and created Blockbuster Music. In August 1998, Viacom sold the Blockbuster Music chain to Wherehouse Entertainment, who was subsequently purchased by Trans World Entertainment
Trans World Entertainment
Trans World Entertainment Corporation is a chain of entertainment media retail stores in the United States. It currently operates just over 440 freestanding and shopping mall-based stores under several brand names....
in 2003.
In 1994, Blockbuster acquired a stake in Spelling Entertainment Group
Spelling Television
Spelling Television Inc. was a television production company that produced popular shows such as Charmed, Beverly Hills, 90210, 7th Heaven, Dynasty and Melrose Place. The company was founded by television producer Aaron Spelling in 1969...
, a media company run by television producer Aaron Spelling
Aaron Spelling
Aaron Spelling was an American film and television producer. As of 2009, Spelling's eponymous production company Spelling Television holds the record as the most prolific television writer, with 218 producer and executive producer credits...
. Viacom increased its stake in Spelling over the years, finally taking full ownership in 2000.
In 1996, Blockbuster bought the Irish video rental store xtra vision, with over 200 stores in Ireland and the UK. In 2009, Blockbuster sold off their Irish operations to Birchall Investments, with the few xtra vision stores in the UK being rebranded as Blockbuster.
Under Viacom
Viacom
Viacom Inc. , short for "Video & Audio Communications", is an American media conglomerate with interests primarily in, but not limited to, cinema and cable television...
, however, after both companies' stocks tumbled in 1994, Viacom eventually purchased Blockbuster.
In 1996, the Blockbuster Entertainment Corporation was renamed Blockbuster, Inc. and the retail stores, then called Blockbuster Video, were renamed Blockbuster. Older stores have not changed. During that year Blockbuster, which was then headquartered in Fort Lauderdale, Florida
Fort Lauderdale, Florida
Fort Lauderdale is a city in the U.S. state of Florida, on the Atlantic coast. It is the county seat of Broward County. As of the 2010 census, the city had a population of 165,521. It is a principal city of the South Florida metropolitan area, which was home to 5,564,635 people at the 2010...
, began studying the idea of moving its headquarters into the Renaissance Tower in Downtown Dallas
Downtown Dallas
Downtown Dallas is the Central Business District in Dallas, Texas USA, located in the geographic center of the city. The area termed "Downtown" has traditionally been defined as bounded by the downtown freeway loop: bounded on the east by I-345 Downtown Dallas is the Central Business District...
. In November 1996 Blockbuster confirmed that it was moving into the Renaissance Tower. 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 employees. In 1998, Blockbuster created DEJ Productions
DEJ Productions
DEJ Productions studio distributed 225 films in just eight years, including the Academy Award winning Monster starring Charlize Theron and the multiple Academy Award winning Crash which won Best Picture of the Year. DEJ was a film acquisition company which began in 1998, shortly after the...
which acquired 225 films primarily to provide exclusive content to its Blockbuster stores prior to being sold off to First Look Studios
First Look Studios
First Look Studios was an independent American film studio that specialized in home video releases of films and TV series. It purchased the Blockbuster subsidiary, DEJ Productions, in 2005...
in 2005.."
In 2002, Blockbuster acquired Movie Trading Company, a Brooklyn chain that buys, sells, and trades movies and games, to study potential business models for DVD and game trading. Also that year, they acquired Gamestation
Gamestation
Gamestation is a chain of UK retail shops selling used and new video games, and was the second-largest specialist video game retailer in the UK until it was bought out by Game in 2007...
, a 64 store UK computer and console games retailer chain.
After independence from Viacom
In May 2005, financier Carl Icahn
Carl Icahn
Carl Celian Icahn is an American business magnate and investor.-Biography:Icahn was raised in Far Rockaway, Queens, New York City, where he attended Far Rockaway High School. His father was a cantor, his mother was a schoolteacher...
waged a successful proxy fight
Proxy fight
A proxy fight or proxy battle is an event that may occur when a corporation's stockholders develop opposition to some aspect of the corporate governance, often focusing on directorial and management positions. Corporate activists may attempt to persuade shareholders to use their proxy votes A proxy...
to add himself and two other members to the board. Icahn accused Blockbuster of overpaying Chairman and CEO John F. Antioco, who served in that capacity since 1997, and who received $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 wanted to keep the company independent, while Icahn wanted to sell out to a private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
firm. In 2007, Antioco left the company, reportedly due to continued controversy over his compensation. He left with a $24.7 million severance package.
On July 2, 2007, the company named James W. Keyes
James W. Keyes
James W. Keyes is the former Chief Executive Officer and Chairman of Blockbuster Inc. He formerly served as the President and CEO of 7-Eleven.-Education:Keyes graduated from the College of the Holy Cross...
(former president and CEO of 7-Eleven
7-Eleven
7-Eleven is part of an international chain of convenience stores, operating under Seven-Eleven Japan Co. Ltd, which in turn is owned by Seven & I Holdings Co...
) as the new chairman and CEO. He introduced a new business strategy that included de-emphasizing the unprofitable Total Access online service, in favor of an in-store, retail-oriented model. His predecessor John F. Antioco attempted this same plan initially in 1997. Additionally, Blockbuster Inc. lifted the ban on using check cards to secure rentals of movies and games in excess of the per-visit check out limit. Customers who were once required to use a major credit card are now free to use their check card.
On September 14, 2007, Blockbuster GB Limited 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 decided to re-brand the stores as BLOCKBUSTER.
On February 17, 2008, Blockbuster proposed a buyout of struggling Circuit City. However, after a due diligence
Due diligence
"Due diligence" is a term used for a number of concepts involving either an investigation of a business or person prior to signing a contract, or an act with a certain standard of care. It can be a legal obligation, but the term will more commonly apply to voluntary investigations...
review of Circuit City's financial books by Blockbuster (pushed for by Carl Icahn
Carl Icahn
Carl Celian Icahn is an American business magnate and investor.-Biography:Icahn was raised in Far Rockaway, Queens, New York City, where he attended Far Rockaway High School. His father was a cantor, his mother was a schoolteacher...
), 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. It even earned CEO James Keyes a spot on Jim Cramer's Mad Money
Mad Money
Mad Money is an American finance television program hosted by Jim Cramer that began airing on CNBC on March 14, 2005. Its main focus is investment and speculation, particularly in publicly traded stocks...
Wall of Shame before the offer was withdrawn. Subsequently Circuit City filed for bankruptcy on November 10, 2008 and after liquidating all its stores ceased operations on March 8, 2009.
Near bankruptcy
On February 10, 2010, Blockbuster announced that it would cease all its operations in PortugalPortugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...
, closing down in the process 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 bankruptcy in the country. By March 2010, Blockbuster was in talks of selling its European operations altogether, but would not disclose the details.
On March 1, 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 "Additional Daily Rate" was charged for each day a member chooses to keep the rental beyond the rental terms.
On March 12, 2010, PricewaterhouseCoopers
PricewaterhouseCoopers
PricewaterhouseCoopers is a global professional services firm headquartered in London, United Kingdom. It is the world's largest professional services firm measured by revenues and one of the "Big Four" accountancy firms....
, 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
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
warning after continued drops in revenue threatened its ability to service its nearly 1 billion dollar debt load.
By April 1, 2010, Carl Icahn
Carl Icahn
Carl Celian Icahn is an American business magnate and investor.-Biography:Icahn was raised in Far Rockaway, Queens, New York City, where he attended Far Rockaway High School. His father was a cantor, his mother was a schoolteacher...
had resigned from Blockbuster's board of directors and sold nearly all his remaining Blockbuster stock.
On May 2010, Movie Gallery
Movie Gallery
Movie Gallery, Inc. was the second largest movie and game rental company in the United States, behind Blockbuster Video. The company rented and sold Blu-ray Discs, DVDs, VHS tapes, and video games...
began to liquidate, leaving Blockbuster as the only remaining national video rental chain in the United States. 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 has been responsible for significant destruction of value to shareholders. Mr. Meyer was elected to the board at Blockbuster's shareholder meeting in Dallas, Texas on June 24, 2010.
On July 1, 2010, the company was delisted from the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
after its shareholders failed to pass a reverse stock split
Reverse stock split
On a stock exchange, a reverse stock split or reverse split is a process by a company of issuing to each shareholder in that company a smaller number of new shares in proportion to that shareholder's original shares that are subsequently canceled. A reverse stock split is also called a stock merge...
plan aimed at heading off involuntary delisting due to the share price trading well below $1 per share. The stock then traded on the over-the-counter bulletin board (OTCBB).
In addition, 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 on filing 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 22, 2010, a source close to Blockbuster announced they would be filing for Chapter 11 in a few days time. It was carrying some $900 million in debt.
In Canada, Blockbuster Canada had operated independently, and it initially remained financially stable. 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 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.
Blockbuster UK, Australia and Chile are also separate entities and currently remain unaffected.
Bankruptcy
On September 23, 2010, Blockbuster filed for Chapter 11 bankruptcy protectionChapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
due to challenging losses, $900 million in debt, and strong competition from Netflix
Netflix
Netflix, Inc., is an American provider of on-demand internet streaming media in the United States, Canada, and Latin America and flat rate DVD-by-mail in the United States. The company was established in 1997 and is headquartered in Los Gatos, California...
, Redbox
Redbox
Redbox is an American company that specializes in the rental of DVDs, Blu-ray Discs, and video games via automated retail kiosks. As of the end of June 2011, Redbox had over 33,000 kiosks in over 27,800 locations....
, and video on-demand services. Blockbuster lagged behind these competitors in online rentals, Redbox-style kiosks, and streaming video. Movie Gallery/Hollywood Video
Movie Gallery
Movie Gallery, Inc. was the second largest movie and game rental company in the United States, behind Blockbuster Video. The company rented and sold Blu-ray Discs, DVDs, VHS tapes, and video games...
had filed for Chapter 7 bankruptcy liquidation
Chapter 7, Title 11, United States Code
Chapter 7 of the Title 11 of the United States Code governs the process of liquidation under the bankruptcy laws of the United States...
earlier in 2010 with a similar reason to Blockbusters'.
At the time of Chapter 11 filing, Blockbuster said they would keep their 3,300 stores up and running; however, the company was expected to close over 900 stores by the end of 2010. In December 2010, Blockbuster 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 has stated that there is the possibility that they may 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 does not have the funds to continue reorganizing and should liquidate.
In April 2011, Blockbuster's landlords objected to its assumption of leases that it seek to assign to soon-to-be-owner Dish Network
Dish Network
Dish Network Corporation is the second largest pay TV provider in the United States, providing direct broadcast satellite service—including satellite television, audio programming, and interactive television services—to 14.337 million commercial and residential customers in the United States. Dish...
Corp., saying among other things, they did not have adequate assurance that the new owner would honor those leases.
On August 31, 2011 the liquidators announced the closure of the remaining 253 Canadian stores and wind up the entire Canadian unit.
Acquisition by Dish Network
On March 28, 2011, South Korean telecommunications company, SK TelecomSK Telecom
SK Telecom Co., Ltd. or Sunkyoung Telecom is a South Korean wireless telecommunications operator, controlled by the SK Group, one of the country's largest chaebol. As a part of SK Group, SK stands for Sun Kyung.SK Telecom is a provider of mobile service in Korea, with 50.5% of the market share as...
, made a surprise bid to buy Blockbuster.
Dish Network
Dish Network
Dish Network Corporation is the second largest pay TV provider in the United States, providing direct broadcast satellite service—including satellite television, audio programming, and interactive television services—to 14.337 million commercial and residential customers in the United States. Dish...
had also expressed interest in bidding; as did Carl Icahn
Carl Icahn
Carl Celian Icahn is an American business magnate and investor.-Biography:Icahn was raised in Far Rockaway, Queens, New York City, where he attended Far Rockaway High School. His father was a cantor, his mother was a schoolteacher...
, despite calling Blockbuster "the worst investment I ever made." Dish eventually won the auction on April 6, 2011, agreeing to buy Blockbuster for US$320 million. On April 19, 2011, it was announced that Dish would only keep 500 Blockbuster stores open. At its peak, Blockbuster had more than 4,000 stores nationwide.
In April 2011, Dish Network
Dish Network
Dish Network Corporation is the second largest pay TV provider in the United States, providing direct broadcast satellite service—including satellite television, audio programming, and interactive television services—to 14.337 million commercial and residential customers in the United States. Dish...
, the Dallas-based video rental chain’s new owner, told the U.S. Bankruptcy Court that it needs more time to negotiate with landlords. Also, it is trying to keep more than 600 Blockbuster stores open. The deal was finalized on April 26, 2011.
Senior Management
- Michael KellyMichael Kelly-Politics:*Mike Kelly , Republican member of the Alaska House of Representatives*Mike Kelly , Australian lawyer, soldier and politician*Mike Kelly , politician and U.S...
, President: 2011–Present - Dennis McGill, Executive Vice President and Chief Financial Officer: 2010–Present
- Kevin LewisKevin LewisKevin Lewis may refer to:*Kevin N. Lewis, RAND strategic analyst, political satirist*Kevin Lewis , American football linebacker...
, Senior Vice President and Chief Marketing Officer: 2008–Present - Greg Nichols, Senior Vice President of Human Resources: 2011–Present
Business model
Sumner Redstone
Sumner Murray Redstone is an American media magnate. He is the majority owner and Chairman of the Board of the National Amusements theater chain...
, whose Viacom conglomerate then owned Blockbuster, personally pioneered a new revenue-sharing arrangement for video, in the mid-1990s. Blockbuster obtained videos for little cost and kept 60 percent rental fee, paying the other 40 percent to the studio, and reporting rental information through Rentrak
Rentrak
The Rentrak Corporation, is an audience measurement company based in Portland, Oregon, United States. As of June 2009, Bill Livek is the company's chief executive officer.-History:...
. What Blockbuster got out of the deal, besides a lower initial price, was that movies were not available for sale during an initial release period, at least at an affordable price point—customers either had to rent, wait, or buy the film on tape at the much higher MSRP targeted at other rental chains and film enthusiasts, at that time then between $70–100 before the end of the initial release period.
Marketing
One of Blockbuster's most well known advertising campaignAdvertising campaign
An advertising campaign is a series of advertisement messages that share a single idea and theme which make up an integrated marketing communication...
s was launched during the 2002 Super Bowl
Super Bowl
The Super Bowl is the championship game of the National Football League , the highest level of professional American football in the United States, culminating a season that begins in the late summer of the previous calendar year. The Super Bowl uses Roman numerals to identify each game, rather...
. It starred the voices of James Belushi
James Belushi
James Adam "Jim" Belushi is an American actor, comedian, and musician. He is the younger brother of comic actor John Belushi.-Early life:Belushi was born in Chicago...
and James Woods
James Woods
James Howard Woods is an American film, stage and television actor. Woods is known for starring in critically acclaimed films such as Once Upon a Time in America, Salvador, Nixon, Ghosts of Mississippi, Casino, and in the television legal drama Shark. He has won three Emmy Awards, and has gained...
, as a rabbit
Rabbit
Rabbits are small mammals in the family Leporidae of the order Lagomorpha, found in several parts of the world...
and a guinea pig
Guinea pig
The guinea pig , also called the cavy, is a species of rodent belonging to the family Caviidae and the genus Cavia. Despite their common name, these animals are not in the pig family, nor are they from Guinea...
in a pet shop, located across the road from a Blockbuster store. The first campaign ended in 2003. The Carl and Ray campaign started again in 2007 starting with a commercial in the first quarter of Super Bowl XLI
Super Bowl XLI
Super Bowl XLI was an American football game that featured the American Football Conference champion Indianapolis Colts and the National Football Conference champion Chicago Bears to decide the National Football League champion for the 2006 season...
.
Blockbuster used Pre-installed software
Pre-installed software
Pre-installed software is the software already installed and licensed on a computer bought from an original equipment manufacturer .-Bundled software:...
in marketing agreements with smartphone
Smartphone
A smartphone is a high-end mobile phone built on a mobile computing platform, with more advanced computing ability and connectivity than a contemporary feature phone. The first smartphones were devices that mainly combined the functions of a personal digital assistant and a mobile phone or camera...
service providers, that cannot be removed without rooting the phone and voiding its warranty.
Quantity and selection of titles
Blockbuster, like most other rental stores, tended to stock more copies of new movies than older releases, in order to capitalize on heavy consumer demand for new release titles. The trade term is "depth of copy". Titles that are more than 12 months past their initial release date were stored as "Blockbuster Favorite" (non-new release) titles. Typically only one to four rental copies of each title were retained past the first year of release. The large volume of new release copies were typically sold after the initial renting rush. Some of these copies were sold as "previously viewed" for around $10–$15, sometimes as low as $3.99. Most Blockbuster locations also accepted trade-ins of used DVDs which are sold alongside the existing stock of previously rented movies.Representing itself as a family-friendly chain, Blockbuster never rented nor sold pornographic titles
Pornography
Pornography or porn is the explicit portrayal of sexual subject matter for the purposes of sexual arousal and erotic satisfaction.Pornography may use any of a variety of media, ranging from books, magazines, postcards, photos, sculpture, drawing, painting, animation, sound recording, film, video,...
in the US market (other markets vary), though the stores carried R-rated and unrated films, including a large number of "soft porn" titles (including Red Shoe Diaries
Red Shoe Diaries
Red Shoe Diaries is an erotic drama series that aired on the American cable television network Showtime from 1992 to 1997 and distributed by Playboy Entertainment overseas...
. Red Shoe Diaries was distributed exclusively by Blockbuster in a now expired agreement with then-sister cable network Showtime during the Viacom era). Blockbuster required employees to check ID and did not allow rental of Youth Restricted Viewing titles with a rating over R to children under 17 unless their parents have specifically allowed it through a family account.
Blockbuster was the exclusive rental chain for The Weinstein Company
The Weinstein Company
The Weinstein Company is an American film studio founded by Bob and Harvey Weinstein in 2005 after the brothers left the then-Disney-owned Miramax Films, which they had co-founded in 1979...
movies since January 1, 2007, although due to the First Sale Doctrine, other rental stores and online DVD rental-by-mail companies, like Netflix
Netflix
Netflix, Inc., is an American provider of on-demand internet streaming media in the United States, Canada, and Latin America and flat rate DVD-by-mail in the United States. The company was established in 1997 and is headquartered in Los Gatos, California...
, could still rent DVDs released by The Weinstein Company.
Adoption of Blu-ray
On June 19, 2007, after a pilot program launched in late 2006, Blockbuster announced that it had chosen Blu-Ray over HD DVDHD DVD
HD DVD is a discontinued high-density optical disc format for storing data and high-definition video.Supported principally by Toshiba, HD DVD was envisioned to be the successor to the standard DVD format...
rental format to rent out 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, United Kingdom, Mexico and Australia.
Retail operations
The company had an Irish
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
subsidiary, Xtravision, which did not operate under the Blockbuster brand name. Blockbuster sold Xtravision at a loss in August 2009 to Birchhall Investments Limited.
Melbourne
Melbourne is the capital and most populous city in the state of Victoria, and the second most populous city in Australia. The Melbourne City Centre is the hub of the greater metropolitan area and the Census statistical division—of which "Melbourne" is the common name. As of June 2009, the greater...
) was the last remaining significant concentration of corporate stores.
In December 2004, Blockbuster announced it wanted to pursue a hostile takeover
Takeover
In business, a takeover is the purchase of one company by another . In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to the acquisition of a private company.- Friendly takeovers :Before a bidder makes an offer for another...
of Hollywood Video
Hollywood Video
Hollywood Entertainment Corporation , known as Hollywood Video, was a VHS, DVD, and video game rental shop company started in 1988...
, its major U.S. competitor. In response, Hollywood Video agreed to a buyout in January 2005 by a smaller competitor, the Dothan, Alabama
Dothan, Alabama
Dothan is a city located in the southeastern corner of the US state of Alabama, situated approximately west of the Georgia state line and north of Florida. It is the seat of Houston County, with portions extending into nearby Dale County and Henry County...
-based Movie Gallery
Movie Gallery
Movie Gallery, Inc. was the second largest movie and game rental company in the United States, behind Blockbuster Video. The company rented and sold Blu-ray Discs, DVDs, VHS tapes, and video games...
. Since then, Movie Gallery has filed for bankruptcy twice and the entire chain of stores was liquidated.
In February 2007, Blockbuster announced plans to sell its Australian subsidiary and franchising rights to Video Ezy
Video Ezy
Video Ezy is Australia's largest video and DVD rental chain with over 550 stores within Australia as well as over 140 stores in New Zealand and 200 throughout South-East Asia. It was founded in 1983.- Competition :...
, subject to approval from the Australian Competition and Consumer Commission
Australian Competition and Consumer Commission
The Australian Competition and Consumer Commission is an independent authority of the Australia government. It was established in 1995 with the amalgamation of the Australian Trade Practices Commission and the Prices Surveillance Authority to administer the Trade Practices Act 1974...
. Blockbuster's Australian operations encompassed 29 company-owned stores and 341 franchises, which Video Ezy would continue to operate using the Blockbuster brand.
On June 29, 2007, The Hollywood Reporter
The Hollywood Reporter
Formerly a daily trade magazine, The Hollywood Reporter re-launched in late 2010 as a unique hybrid publication serving the entertainment industry and a consumer audience...
announced 282 US stores would close that year.
On December 18, 2007, a store in Dallas was renamed Blockbuster Media.
Blockbuster announced that it plans to shut down its stores in Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....
due to poor revenues, which it blamed on the effect of piracy
Copyright infringement
Copyright infringement is the unauthorized or prohibited use of works under copyright, infringing the copyright holder's exclusive rights, such as the right to reproduce or perform the copyrighted work, or to make derivative works.- "Piracy" :...
on the movie market. The company has already closed down its stores in Ecuador
Ecuador
Ecuador , officially the Republic of Ecuador is a representative democratic republic in South America, bordered by Colombia on the north, Peru on the east and south, and by the Pacific Ocean to the west. It is one of only two countries in South America, along with Chile, that do not have a border...
, Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
, Portugal
Portugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...
and El Salvador
El Salvador
El Salvador or simply Salvador is the smallest and the most densely populated country in Central America. The country's capital city and largest city is San Salvador; Santa Ana and San Miguel are also important cultural and commercial centers in the country and in all of Central America...
. In March 2010, Blockbuster announced that it intended to sell all operations in Europe.
In December 2009, Blockbuster announced a partnership with Wind Mobile
Wind Mobile
Wind Mobile is a Canadian wireless telecommunications provider operated by Globalive Communications Corporation. The company initially launched mobile data and voice services in Toronto on December 16, 2009 and two days later in Calgary...
. Launch day would see a roll out of 13 stores in Toronto and 3 in Calgary carrying Wind Mobile phones inside Blockbuster stores.
In March 2010, Blockbuster paired up with Time Warner Inc. to have Warner Bros.
Warner Bros.
Warner Bros. Entertainment, Inc., also known as Warner Bros. Pictures or simply Warner Bros. , is an American producer of film and television entertainment.One of the major film studios, it is a subsidiary of Time Warner, with its headquarters in Burbank,...
movies be available in Blockbuster stores on the DVD release date and not be subject to a four-week delay in availability. Similar agreements were also made with Universal
Universal Studios
Universal Pictures , a subsidiary of NBCUniversal, is one of the six major movie studios....
and 20th Century Fox
20th Century Fox
Twentieth Century Fox Film Corporation — also known as 20th Century Fox, or simply 20th or Fox — is one of the six major American film studios...
.
Also in 2010, Blockbuster shuttered 545 operated stores in the 2010 fiscal year.
GameRush stores
GameStop
GameStop Corporation is an American video game and entertainment software retailer. The company, whose headquarters is in Grapevine, Texas, United States, operates 6,500 retail stores throughout the United States, Canada, Australia, Austria, Denmark, Finland, France, Germany, Ireland, Italy, New...
and Game Crazy. Blockbuster used their location status to get instant coverage; it also promoted these stores by hosting video game tournaments, special trade-in offers, and a more "hip" look to the selection and staff. However, when Blockbuster introduced "The End of Late Fees" GameRush was put on the chopping block. In April 2007, GameRush stores were reduced back to just a games section.
Blockbuster UK operated Trade functions in all their stores, buying in and selling preowned consoles, DVDs games and accessories with customers, and pricematching with other high street competitors by offering either store credit against other purchases, or cash for trade ins.
Blockbuster Express
Blockbuster LLC licensed its brand to self-service kiosk maker NCRNCR Corporation
NCR Corporation is an American technology company specializing in kiosk products for the retail, financial, travel, healthcare, food service, entertainment, gaming and public sector industries. Its main products are self-service kiosks, point-of-sale terminals, automated teller machines, check...
. About 10,000 Blockbuster Express self-service movie rental kiosks are operational in 2011. It competes with Redbox
Redbox
Redbox is an American company that specializes in the rental of DVDs, Blu-ray Discs, and video games via automated retail kiosks. As of the end of June 2011, Redbox had over 33,000 kiosks in over 27,800 locations....
movie rental kiosks made by Coinstar
Coinstar
Coinstar, Inc. is an American company.The firm's original focus was the conversion of loose change into paper currency, donations or gift cards via coin counter kiosks...
.
Online rentals
United States
In August 2004, Blockbuster introduced a DVD-by-mail service in the U.S. to compete with the established market leader, NetflixNetflix
Netflix, Inc., is an American provider of on-demand internet streaming media in the United States, Canada, and Latin America and flat rate DVD-by-mail in the United States. The company was established in 1997 and is headquartered in Los Gatos, California...
.
Blockbuster's U.S. online operation started with around 10 warehouses; further expansions every year brought that number to 41, plus 1400+ stores in the Blockbuster Online network. Most Blockbuster independent franchises did not honor the Total Access program. The company had 1.5 million subscribers at the end of the third quarter of 2006.
Blockbuster's move to follow the business pattern with its online rentals as was established by Netflix prompted Netflix to sue Blockbuster for infringement of patent. Blockbuster counter sued with a counterclaim alleging deceptive practices with its patent which it alleges was designed to maintain an illegal monopoly. The suits were eventually settled, and while the terms were not disclosed it was later reported that Netflix recorded a settlement payment from Blockbuster of $4.1 million in the second quarter of 2007.
Blockbuster offered several online movie rental plans. In select cities customers could add games to their movie rental queue as if they were included in their plan, but game rentals resulted in a separate additional fee which was not displayed or charged until the end of the billing cycle. Until July 26, 2007, Blockbuster offered and advertised unlimited free in-store exchanges of online rentals with all plans, included free of charge. Since then there were several changes back and forth with regard to this policy; as of March 2010 customers were allowed a limited number of in-store exchanges.
At the end of 2006, Blockbuster Total Access had 2.2 million customers, exceeding their original goal of 2 million, according to the official website. After an aggressive media campaign that accounted for much of Blockbuster's $46.4 million net loss in the first quarter of 2007, the Total Access subscriber base surpassed 3 million customers in total, marking the company's highest subscriber growth quarter ever. By 2009, however, the company was declining to provide figures when asked by the Wall Street Journal.
On January 5, 2007, Southern Stores Inc, one of Blockbuster's largest franchise operators in the United States, filed a lawsuit in federal court alleging that, by introducing Blockbuster Online and Blockbuster Total Access, the rental chain has undercut the group's franchise agreement.
On August 6, 2010, Blockbuster By Mail subscribers gained access to Blockbuster's library of console games, in addition to movies and television shows.
United Kingdom
In the UK, Blockbuster had been providing a version of online rentals since October 2002 with its "Pay Per Rent" service. This was more like a postal version of store rentals than the traditional online DVD rental subscription model, with per-rental prices of £3.50–£4.50, with a rental period of five nights (usually Monday-to-Friday, not including postal delivery times), and late fees (£0.70–0.90 per disc).In May 2004, Blockbuster also introduced a conventional online subscription service. The unlimited three-disc plan is £14.99/month. Unlike the US service, there was no in-store disk exchange. There are a total of 600 Blockbuster stores in the U.K.
In April 2005, Blockbuster UK started trialing a combined online and in-store rental program known as 'OnlineXtra'. This entitled customers paying an extra £2 online each month to rent two additional movies in-store (sent to them via the post). This program was discontinued in 2006, with those on onlineXtra plans moved over to traditional online-only rental packages.
In early 2008, Blockbuster UK launched a new version of onlineXtra, which allowed customers to print vouchers to use in Blockbuster stores. These onlineXtra plans are still available.
2008 was a big year for Blockbuster UK; the website was completely overhauled, improving navigation and user experience. Store customers were given a full interactive section so that they could properly track what was in their local Blockbuster store, while online users were treated to a radical overhaul of the rental section on site which introduced innovative new browse pages such as Browse By Theme and Browse By Year. Upon seeing the new site, independent DVD rental comparison site Choose DVD Rental.co.uk re-reviewed the site - "The Blockbuster DVD rental site - from where you'll be making your DVD rental selections - is sporting a brand new design which... is a world away from the clumsy mess of its former incarnation which tried to balance the high-street business alongside the online DVD rental options with a mish-mash of slipshod and heavy graphics that made the site more than a little bit of a pain to use regularly.
Now with the new, easy-to-use design the rental service is simple to navigate around and offers plenty of added extra's for anyone looking for inspiration about what to rent."
"More importantly though, Blockbuster DVD rental pretty much leads the pack when it comes to customer satisfaction and title turnaround putting them at the very pinnacle of the UK's DVD rental market."
Late in 2008, following in the footsteps of the stores, Blockbuster UK added a buy online section to the site - allowing Blockbuster online members to buy new Blu-rays discs and games. This was expanded to include other categories in 2009 and 2010. In 2009, this was integrated with the store base, allowing any customer visiting a Blockbuster High Street store in the UK to access the entire range of movies and games sold online. Paying in-store for the item.
In 2009, Blockbuster expanded its range of exclusive titles both online and in-store - boasting Hollywood heavyweights like Gran Torino, Changeling, Taken and Knowing alongside more arthouse, award-winning pictures such as Che Parts 1 and 2, The Young Victoria and 50 Dead Men Walking. Blockbuster has exclusive titles available each and every month, so Blockbuster customers can enjoy top movies before the likes of other High Street brands like HMV, Play and LOVEFiLM.
In November 2009, Blockbuster UK became the only rental company to be able to rent titles from Universal Pictures online, giving them a big advantage over their competitors such as Netflix and LOVEFiLM.
In January 2010, Blockbuster UK launched an online blog, bringing together editorial content with public-facing announcements, following in the steps of its US cousin. The blog was added to the Blockbuster UK website soon after launch with readers of its This Week and Cinemascape articles redirected to the blog.
In April 2010, Blockbuster UK upgraded its website with improved search algorithms and improved product pages. It also launched Facebook, Twitter and YouTube channels. Customer responses to the blog that announced the changes were generally quite positive.
In May 2010, Blockbuster UK introduced a monthly video show called the BB Insider. It lasted for eight episodes before being discontinued and replaced with weekly video roundup in January 2011. In the same month, they announced that they were working on an iPhone App for online subscribers. Images of the app were subsequently leaked on the Blockbuster UK Facebook channel prior to the planned September 2010 launch.
In June 2010, Blockbuster UK expanded its onlineXtra program to provide additional benefits to all online subscribers, with all online rental subscribers able to rent for £1.50 in any Blockbuster store and get 10% off when they buy in the store. In February 2011, Blockbuster UK announced that they had changed their policies for online vouchers - allowing customers to show the voucher to be scanned in the store on smart phone and tablet devices.
In September 2010, Blockbuster UK launched a Click & Collect service for store customers - allowing Blockbuster High Street shoppers to reserve movies in-store via the Blockbuster website before collecting them from a Blockbuster store.
In January 2011, Blockbuster UK launched a new weekly email newsletter called Blockbuster Showcase. There are two versions sent out every Monday - one for online subscribers and one for store customers. In the same month, Blockbuster UK announced the launch of new rental pages at Blockbuster UK, with an improved Cinema experience.
In February 2011, Blockbuster UK announced price drops in all 600 Blockbuster stores in the UK along with a new Blockbuster loyalty card program. These price drops were followed by a price drop of the Blockbuster UK online pay per rent service.
In April 2011, Blockbuster UK announced the launch of 'Top Ticket', a new feature of their online rental service allowing online rental customers to 'GUARANTEE' their next movie. Available free for all Blockbuster unlimited rental subscribers, all Unlimited rental plans get at least one Top Ticket each month. This makes Blockbuster UK the first rental service to offer this type of guarantee in the world. Customer reaction was mixed, with some customers feeding back positively about the new feature, while others complaining that they still could not guarantee the movie they wanted. Top Ticket was launched as a dedicated section on the Blockbuster UK website in the same month.
In May 2011, Blockbuster UK announced a lower new release rental price of £2.99 for new release movies along with an expansion of its store games rentals, allowing new games to be rented for £5 for five nights. Blockbuster announced the end of late fees and the return of the Blockbuster Promise in a Blockbuster TV Commercial.
In July 2011, Blockbuster UK announced the launch of a new website, Blockbuster Marketplace. This site is devoted to selling second-hand DVDs, Blu-rays and games and can be found at http://market.blockbuster.co.uk
Denmark
Blockbuster came to Denmark in 1996 with the acquisition of the 29 ChristianshavnChristianshavn
Christianshavn is an artificial island neighbourhood located in Copenhagen, Denmark. It was founded in the early 17th century by Christian IV as part of his extension of the fortifications of Copenhagen. Originally it was laid out as an independent privileged merchant's town with inspiration from...
Video stores. Since they have opened many stores across the country and is now at 70 stores in total. Their stores are open 365 days a year with hours usually from pm. 10.00 to 22.00.
Brazil
Blockbuster was the largest rental store in the entire country. But finances were not good enough due to the high rental prices. Lojas AmericanasLojas Americanas
Lojas Americanas is a Brazilian retail chain founded in 1929 in the city of Niterói, Rio de Janeiro, by Austrian Max Landesmann and Americans John Lee, Glen Matson, James Marshall and Batson Borger...
the largest Brazilian department store acquired half of the shares and now it is named under Americanas Express Blockbuster. The store layout is now similar to a regular American store with a Game Rush, but instead of games it offers electronics goods like computers and DVD Players, groceries like candies and microwave popcorn, and even toys from Mattel
Mattel
Mattel, Inc. is the world's largest toy company based on revenue. The products it produces include Fisher Price, Barbie dolls, Hot Wheels and Matchbox toys, Masters of the Universe, American Girl dolls, board games, and, in the early 1980s, video game consoles. The company's name is derived from...
and Hasbro
Hasbro
Hasbro is a multinational toy and boardgame company from the United States of America. It is one of the largest toy makers in the world. The corporate headquarters is located in Pawtucket, Rhode Island, United States...
's board games. Blockbuster sold its Brazilian stake in 2007 for a steep loss.
In January 2006, Blockbuster Brazil also introduced an online rental service now featuring both DVD and Blu-ray plans. There were currently four Block plans available with prices ranging from R$34.90 to R$79.90. The 3-disc plan with unlimited exchanges was R$49.90/month. Unlike the US service, there was no in-store disk exchange.http://www.blockbuster.com.br
Movielink acquisition
On August 8, 2007, Blockbuster announced that they have reached an agreement to purchase MovielinkMovielink
Movielink was a web-based video on demand and electronic sell-through service offering movies, TV shows and other videos for rental or purchase. First available on November 11, 2002, Movielink drew its content offerings from the libraries of Paramount Pictures, Sony Pictures Entertainment,...
. According to the 8-K filing by Blockbuster, the total purchase price was $6.6 million. The exact terms of the agreement have yet to be disclosed, but it can be assumed that the deal was to include content agreements with the major studios, thus giving Blockbuster access to one of the largest libraries of downloadable movies.
Late fee lawsuits
In 2005, Blockbuster launched a marketing campaign describing changes in its late fees policy and offering "No Late Fees" on rentals. The program sparked investigations and charges of misrepresentation in 48 states and the District of Columbia, as state attorneys general including Bill LockyerBill Lockyer
William Westwood "Bill" Lockyer is an American politician. He is the current 32nd State Treasurer of California, elected in 2006 and re-elected in 2010. He has also served as California Attorney General and President Pro Tempore of the California State Senate...
of California and Eliot Spitzer
Eliot Spitzer
Eliot Laurence Spitzer is an American lawyer, former Democratic Party politician, and political commentator. He was the co-host of In the Arena, a talk-show and punditry forum broadcast on CNN until CNN cancelled his show in July of 2011...
of New York argued that customers were being automatically charged the full purchase price of late rentals and a restocking fee for rentals returned after 30 days. In a settlement, Blockbuster agreed to reimburse the states the cost of their investigation, clarify communication to customers on the terms of the program and offer reimbursement to customers charged fees prior to the clarification. New Jersey filed a separate lawsuit and was not a party to the settlement.
The 2005 controversy came after a related lawsuit settled in 2002 in Texas. That lawsuit, alleging exorbitant late fees, led the company to pay $9.25 million in attorney fees and offer $450 million in late fee refund coupons (which were rent-one get-one-free coupons, and thus required the customer to make an initial expenditure). The company estimated that the coupons would ultimately cost about $45 million depending on the redemption rate; an attorney for the plaintiffs estimated the final cost at closer to $100 million at a redemption rate of about 20% (calculated based on a similar case in Michigan).
Slogans
Blockbuster used "Wow! What a Difference!", "Make It a Blockbuster Night", "Bringing Entertainment Home", "Go Home Happy", "Let The Good Times Roll", and "The New Blockbuster" as their past slogans. They currently use multiple slogans like "America's #1 Home Entertainment Store" and Blockbuster Online's slogan "The Movie Store at Your Door".External links
- Official mobile site
- Online video guide
- Crocker, Ronnie and Purva Patel. "Has digital age killed the video store?" Houston ChronicleHouston ChronicleThe Houston Chronicle is the largest daily newspaper in Texas, USA, headquartered in the Houston Chronicle Building in Downtown Houston. , it is the ninth-largest newspaper by circulation in the United States...
. September 24, 2010. - http://www.theonion.com/video/historic-blockbuster-store-offers-glimpse-of-how-m,14233/November 2008 The OnionThe OnionThe Onion is an American news satire organization. It is an entertainment newspaper and a website featuring satirical articles reporting on international, national, and local news, in addition to a non-satirical entertainment section known as The A.V. Club...
spoof of a Blockbuster Store becoming an historical experience 'museum'] - http://www.blockbuster.com/corporate/franchiseFAQ