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Benjie

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Submitted By benjieblase
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Pages 27
Blockbuster Video or Netflix
This case started as Blockbuster Video but has morphed to include Netflix. The issues facing the two companies are similar, so you can choose to address the case from the perspective of either company. Just specify which perspective to use.
In 1985, Blockbuster Video (now a subsidiary of DISH Network ticker: DISH) quickly became a sensation. Households had just begun to acquire video-tape players in earnest. Few people were willing to pay $85 to buy Hollywood videos. Cable TV existed, but most people still watched broadcast television stations, and only a few premium Cable channels existed.
Satellite receivers existed, but the huge satellite antenna was generally only used by people who lived in the middle of nowhere and had the space to put the ugly dishes.
Customers quickly jumped onto the idea of renting videos. The early market was dominated by small mom-and-pop rental shops that bought a few copies of hit movies and rented them in a small regional area. For a while, video-rental stores had a tinge of disrespectability because many of them rented adult videos.
Then, Blockbuster Video went national with large, bright, well-lit stores. To remain family-oriented, the chain does not carry videos with anything more than an ―R‖ rating.
Blockbuster quickly took over the market. The original system pioneered the use of bar codes. Customers carried a bar-coded ID card and movie cases were printed with specific codes. The computer system made checkout easy and enabled people to return videos afterhours simply by placing them in a drop box. The company initiated a three-night, $3 rental program, making it easier to rent videos for the weekend.

A History of Growth and Problems
Blockbuster was started by David P. Cook, a Dallas computer expert who wanted to develop a big, bright, computerized video superstore. H. Wayne

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