...Blockbuster’s lack of blockbuster Frankie L. Jones February 11, 2013 BUS: 642 Thomas Hennefer Abstract Blockbuster video, the once dominant force behind consumers’ movie rental needs has suffered a significant loss in revenue to the rise of RedBox and Netflix. The competitive advantage offered by the two companies has tapped into Blockbuster’s market and cause a lack of blockbuster for the company. Since 2009 the company has continue to reported decreased revenue and profits against its competitors. In 2010 the company filed bankruptcy and has since then implemented new services and products similar to its competitors, however, customer’s still prefer RedBox and/or Netflix. Once upon a time on a Friday night after work, you were looking to go home, relax, and watch a good movie. You come up on a big blue sign with yellow lettering, and think, “I’LL RUN TO BLOCKBUSTER!” Today, we’re looking for the nearest RedBox, or browsing Netflix for a good flick. There was time when families would take a trip to Blockbuster, order a pizza, and make it a movie night. Today, people have the luxury of not even leaving the house to find a good movie; thanks to Netflix. After a routine run to Wal-Mart, Walgreens, or Kroger’s it has become second nature to browse the RedBox, especially since the cost is only $1. But what has happened to good ol’ Blockbuster? Over the past few years Blockbuster video locations have steadily declined. Blockbuster, the once powerful source for movie...
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... quality, and pricing schemes. Blockbuster quickly emerged in 1985 and began buying every small store they could, becoming the de facto sole franchise for movie rentals. This changed in 1999 when Netflix first began their DVD by mail service. Netflix rentals allowed viewers and movie watchers to rent movies from the comfort of their own home. Additionally, the customer wasn’t penalized for returning the movie late. The years that followed produced a long, protracted battle that Netflix appears to have survived on top. That being said, both companies made significant mistakes and have lost millions of potential customers in the process. In this paper, a brief history of each of the company will be presented, a diagnosis of the major problems, analysis into these problems, an evaluation of potential solutions and finally, recommendations for Blockbuster and Netflix to be able to address their problems. ANALYSIS Scott Cook founded Blockbuster Video and opened the first store in Dallas, Texas on October 26, 1985. Later bought by entrepreneur Wayne Huizenga, Blockbuster Video grew to over 4,000 stores in the mid-2000’s and earned the spot as the number one video rental store in the country. Blockbuster made frequent changes to their business model, by first adding video games; later music was added. In 1993, Viacom purchased Blockbuster for $8.4 billion dollars but by 2006, they were only worth $500 million dollars. In 2004, Blockbuster launched their online DVD rental...
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...Discuss this product or service in terms of its current target market demographics using U.S. Census Data. The product/service I chose is in store movie rental and purchase. I.e. Blockbuster Videos. While DVD sales declined for a third straight year in 2009, consumer appetite for viewing movies at home remains very healthy as new physical and digital services for buying and renting movies gain in popularity. The proliferation of movie rental kiosk machines over the last year was probably the most visible sign of consumer interest in viewing movies at home. To understand the impact of rental kiosks and other movie services on household disc purchasing (DVD and Blu-ray), a survey was fielded to panelists who were identified as disc buyers and asked them to report their movie transactions from channels not tracked by scanning. This included rental transactions (both physical and digital rentals) and downloads. One finding from the study was that average disc purchasing (buy rate) among households who also rented movies on physical DVD or Blu-ray declined in 2009 at a steeper rate compared to the average for all disc buying households. The buy rate among households renting a movie on DVD or Blu-ray declined by -11% in 2009 vs. -7% among all disc buying households. Survey results indicated that 34% of these renting households had rented a movie from a kiosk. In addition, households renting from a kiosk are increasingly turning to kiosks to rent movies with 63% reporting that...
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...Blockbuster Fights for Survival against Intense Competition - Blockbuster struggling to compete with competition (Netflix, Apple, Amazon, cable providers, etc) - Blockbuster video started in 1985, Wayne Huizenga bought Blockbuster in 1987, took company from 130 stores to 1,500 - Acquired Sound Warehouse and Music Plus in 92, also purchased Cityvision which provided 975 stores in UK - Bill Fields came in as CEO, he had the Wal-Mart attitude and he closed down 50 stores, he also moved the headquarters to Texas from Florida, some upper management did not want to relocate and this caused vacancies. - John Antioco new CEO changes – repositioned back to traditional competitive advantage in home entertainment rentals, finalized transformation of Blockbuster back to focusing on movie and game rental industry - 2003 – Blockbuster launched rental subscription program which allowed subscribers to rent an unlimited numbers of movies - Blockbuster was able to capitalize on home entertainment growth trends, with blockbuster.com - James keys replaced Antioco in 2007, he wanted to use technology to transform the company, and he wanted to change the image of the company from rental shop to a content shop - Stock of blockbuster went from $26 to $4.30 from 2002 to 2007; Keyes joined Blockbuster when they were closing down many shops - Movielink created by 5 major Hollywood studios, blockbuster bought this company because they studios did not have experience. - From 2005 to 2007, blockbuster...
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...Date: February 27, 2011 u07d2 Letter from the CEO Subject: E-Business Solutions Dear Blockbuster, Incorporated Employees Blockbuster has implemented a Total Access program. To implement this program, Blockbuster must do away with late fees and focus their advertising on our online rental subscribers. Other services that will enhance Blockbuster will be online subscription services, guaranteed in stock, and Blockbuster movie pass and Blockbuster game pass. These activities will enhance the value of our product. Blockbuster is “to perform for our customers the highest level of quality construction services at fair and market competitive prices, to ensure the longevity of our company through repeat and referral business achieved by customer satisfaction in all areas including timeliness, attention to detail and service-minded attitude, to maintain the highest levels of professionalism, integrity, honesty and fairness in our relationships with our suppliers, subcontractors, professional associates and customers.” We as a company want to keep the customer satisfied through competitive prices, timely delivery of our product, and an enhanced and image rich entertainment programs. This can be done through our Liquid guide that lets the consumer maneuver easily through the digital content of our Total Access Program. Blockbuster expects their employees to pay attention to detail and to keep the customer in mind when they are responding to problems or questions...
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...Blockbuster Video Customer Survey Kurt Dessert, Shevonne Kilpatrick, Erik Kraft, Stephanie Upchurch QNT/561 November 11, 2013 Hui Zhang/Thomas Allen Blockbuster Video Customer Survey Background and Description of Problem For many years, Blockbuster led the pack in the home movie, video, and game rental services. The company had a sound and simple business model that enabled customers to watch top-billing movies in the comforts of their living room for a fraction of what it would cost to attend the movies. In addition to providing customers with low cost video service and comfort, Blockbuster housed more than 5,000 retail stores conveniently located in every community. It was a solid business model until technology and a new competition displaced it. Team A will address the causes that led to the fall of Blockbuster such as declining profits, low adaptability, and low accessibility. Furthermore, Team A will develop a survey questionnaire to address the company’s problems and determine possible solutions for Blockbuster LLC. Blockbuster LLC, formerly Blockbuster Inc., is an American-based provider of home movie and video game rental services. Blockbuster distributes its products to customers in four ways: in-store rentals/sales, DVD-by-mail, vending machines, and online streaming (Wikinvest, 2013). The company’s in-store selection offers both new/used movies, and game rentals to include Blu-ray DVDs. Their mail service offers their customers an Internet-based subscription...
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...Paul Noonan Micky Thakkar Carlton Graham Dave Hasty Christina Carroll Busgr 567, Marketing Strategy Dr. Joyce Hunter May 25, 2010 Case Study: Blockbuster, Inc. [pic] Table of Contents: Dave Hasty Mission Statement, History of Blockbuster, pg. 3-5 Carlton Graham/Paul Noonan Marketing Strategy, 5-6 Marketing Mix, 6 Target Markets, 6-7 Micky Thakkar Marketing Objectives and Goals 7-10 Paul Noonan/Micky Thakkar Advertising and Promotion Strategies 10-13 Environmental Analysis and Porter Analysis 13-15 Christina Carroll SWOTs 15-19 Netflix SWOT Redbox SWOT Blockbuster SWOT Competitive Advantage Strategic Focus Paul Noonan Financials 19-20 Future Trends 20 Recommendations 20-22 All Questions 22-25 Bibliography 26 Compiled by Paul Noonan The History of Blockbuster Inc. Blockbuster’s mission statement is “To be the global leader in rentable home entertainment by providing outstanding service, selection, convenience and value.” Blockbuster is an American based chain of retail stores renting DVD, Blu Ray, and video games. They have over 9,000 locations in the US and 25 other countries worldwide. It is headquartered in the Renaissance Tower located in Dallas, Texas. The first store was opened in Dallas, Texas 1985 by David Cook. Cook had started a company called Cook Data Services Inc. in 1982 selling software to Texas’s oil and gas industries.[i] When the industry went flat Cook was searching for another source...
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...4-1-2013 A Blockbuster Failure: How an Outdated Business Model Destroyed a Giant Todd Davis John Higgins Recommended Citation Davis, Todd and Higgins, John, "A Blockbuster Failure: How an Outdated Business Model Destroyed a Giant" (2013). Chapter 11 Bankruptcy Case Studies. http://trace.tennessee.edu/utk_studlawbankruptcy/11 This Article is brought to you for free and open access by the College of Law Student Work at Trace: Tennessee Research and Creative Exchange. It has been accepted for inclusion in Chapter 11 Bankruptcy Case Studies by an authorized administrator of Trace: Tennessee Research and Creative Exchange. For more information, please contact trace@utk.edu. A Blockbuster Failure: How an Outdated Business Model Destroyed a Giant Todd Davis, John Higgins Table of Contents I. Introduction 1 II. Background Information 1 a. Business Model 5 b. Key Events Leading to Chapter 11 7 III. Chapter 11 12 a. “The Plan” 12 b. Filing 14 c. Petition Schedules: Liabilities, Creditors, and Assets 15 d. First Day Motions 19 e. DIP Financing 28 f. The Unsecured Creditors Committee 32 g. Administrative Expenses – Professional Fees 32 IV. The § 363 Sale 38 a. Road to the § 363 Sale 38 b. The Motion 41 c. Sale Terms 42 d. Blockbuster’s Business Justification for the § 363 Sale 46 e. Assumption and Assignment 48 f. Administrative Relief Requested 49 g. Creditors Object to the Proposed...
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...dynamic technology improving digital media. Consumers rented movie videos from their local video stores and cable television was emerging. Ever changing technology changed formats from the Video Home System (VHS) to compact discs (CDs) and digital video discs (DVDs). The latter format had improved picture quality and longer viewing capacity. Visiting a video store was an enjoyable jaunt for many families, who wanted to enjoy movies in the convenience of their own home when the weekends rolled around. With this in mind, I was saddened to hear the demise of Blockbuster Video, which first opened in 1985 and recently announced this year that it was closing all its brick and mortar stores. According to Means (2013), “Blockbuster and, indeed, video stores in general were the products of a surge in new technology — and were ultimately destroyed by another surge of new technology that followed.” I wonder if Blockbuster Video had the foresight to see that consumer demands were changing as quickly as the rapidly changing technology, could they have reinvented...
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...Failure Analysis/Change Strategy: Blockbuster vs Netflix LDR/531 Failure Analysis/Change Strategy: Blockbuster vs Netflix Organizational Behavior Theories The organizational behavior theories which explains Netflix’s success are two; decision-making and systems approaches. Netflix made the monumental decision to become a virtual dvd rental versus a brick and mortor provided a solution in the company’s goal and vision to be ahead of technological advances in the industry. Netflix took on the systems approach in understanding and measuring the company’s input and output processes. Netflix uses the systems approach to integrate and drive processes in developing adaptive capacities, driving innovation. Blockbusters organizational behavior theory focus was on scientific leadership. The company placed a great deal of focus on how to become more effective in the company’s brick and mortor business, redefining company objectives and direction. How employing this theory failed the company was the leadership decision to not pledge the same level or more focus on the click initiative which the company could not capture the needed momentum in becoming competitive with Netflix. Blockbuster could have had a more competitive edge over Netflix sustaining its presence in the industry if only the company could define better performance practices leveraging its click business over its brick and mortor presence. Role of the organization on the Fail/Success So how did an upstart company...
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...which has put better equipment in the hands of more people, it has never been easier to physically make a movie than it is today. Distributing the movie or, getting a studio to buy it so that it can be put into theaters, on the other hand, is often more difficult. Financial difficulties have forced the closing of smaller studios that had been the best option for filmmakers with a lot of ideas but little money. It does mean, however, that it’s harder for worthy movies to be distributed even at what is known as an art house—a theater that shows low–budget and challenging films (the ones that aren’t advertised in commercials during football games). Many studios are simply not spending the money to buy as many films, and this leaves all of us the poorer. At the same time small studios are cutting back, the larger studios spend hundreds of millions in the hopes of coming up with a blockbuster (a film that makes a lot of money at the box office). It’s a form of high stakes gambling: The studios risk a lot of money in movies they believe will be blockbusters, in the hopes of getting a lot back in return. Technology has improved to the point that it is now possible to watch a blockbuster film on a hand held electronic device like an iPod, for example. (Ironically this trend toward individual viewing of smaller images harkens back to Thomas Edison’s Kinetoscopes of 1894, before the days of movie projectors, when people stuck a penny into an arcade machine that let them watch a movie through...
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...Blockbuster vs. Netflix Introduction Blockbuster opened in 1985 and in its “first 20 years of business, the movie rental giant opened 9.100 stores in 25 countries” (Laudon, 2007, p. 121). Netflix launched in 1998 using a new business model and became Blockbusters biggest threat. The paradigm shift in the rental industry from having to travel to a store and rent a movie to being able to have a movie delivered to your mailbox changed the way people think about media entertainment. The next shift will be having the technology to download movies and shows directly to a television. Analysis Blockbuster and Netflix are using two different information system strategies. Blockbuster, which is a traditional retail store with a physical location focused on creating a market niche. It used “an automated point-of-sale system” and was able to use “these data to monitor sales and to analyze the demographics, and rental and sales patterns for each store to improve its marketing decisions” (Laudon, 2007, p. 121). Netflix came onto the scene with a completely different strategy, product differentiation. Emphasizing convenience, they created a system to allow consumers to order movies sent to their customers homes and returned on the individual’s time schedule. Netflix was able to use mass customization and give consumers an individually tailored service without increasing the needed resources. Using the Business Value Chain Model, Netflix has used information technology on almost...
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...The Closing of Blockbuster Video’s Stores The Closing of Blockbuster Video’s Stores Hanna, Peter Southern New Hampshire University OL-500 Hanna, Peter Southern New Hampshire University OL-500 Abstract: With increasing competition and the growth of technology, it is important that organizations maintain focus on an innovative and clear strategic direction as well as always striving for customer satisfaction. There are four major issues, inefficient and arrogant strategic direction, customer dissatisfaction, fiscal irresponsibility and a lack of innovation that ultimately led to the demise of the video rental “Kingpin” also known as Blockbuster Video. Introduction: Organizational strength relies on its infrastructure and strategic management. The study of organizational behavior within any organization is intriguing. Success relies on many factors that involve leadership, strategic vision and a motivated team poised for the challenges of the day to day operations of the organization. Blockbuster Video skyrocketed to the top of the movie entertainment empire. A Leader in the entertainment industry, Blockbuster Video was plagued by challenges and failures that eventually led to their ultimate demise after a short lived 25 years. This research paper will attempt to answer how the King of the video entertainment empire withered away, even after years of company acquisitions and finally merging with Dish Network. Blockbuster Video faced fierce competition...
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...Table of Contents Company and Background....................................................................................................................................4 Rationale..................................................................................................................................................................4 Target Audience.......................................................................................................................................................4 Company History.....................................................................................................................................................5 Legal Status..............................................................................................................................................................5 Company Issues.......................................................................................................................................................5 Vision Statement......................................................................................................................................................6 Mission Statement....................................................................................................................................................6 Ethics.....................................................................................................................................
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...Movie Rental Industry: Blockbuster Case David Cook founded Blockbuster video in 1985, opening the first store in Dallas Texas and has grown to become the world's number one video chain. Mr. Cook took the idea of video rental and improved it by creating the video superstore concept. Many family-owned video rental stores could not compete against Blockbuster' stores. Blockbuster stores were highly visible stand-alone structures that appealed to customers. Blockbuster His stores had a wider selection of videos and offered longer hours of operation. He focused on creating a family image for his stores by including a children's section and excluding adult movies. He also made it possible for busy people and people with children the opportunity to view movies for a longer period by starting the 3 day rental period. In 1986, Mr. Cook sold 33% of Blockbuster to h, m & Flynn and in 1987; he decided to leave the company making Mr. Huizenga CEO (Smiley, 2010). Mr. Huizenga had experience growing small companies but no experience in retail, so he hired the best managers who were capable of developing a retail chain. Under Mr. Huizenga's leadership Blockbuster experienced major growth. By 1992, Blockbuster had over 3,000 stores (1,000 franchise and 2,000 company owned). Blockbuster had established 3 operating divisions to manage functional activities. These three divisions cut cost for the company by eliminating the outsourcing of these jobs. Years ago, almost everyone who rented a video...
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