BLOCKBUSTER VIDEO STORES

BLOCKBUSTER VIDEO STORES

Abstract

In this study we try to explore the overview of Blockbuster video stores in a holistic context. The main focus of the research is on the reasons of failures and its relation Blockbuster's strategies. The research also analyzes many aspects of competitive environment in which Blockbuster is operating and tries to gauge the effects of competitive environment on Blockbuster stores. Finally the research describes various factors which are responsible for the failure of Blockbuster video stores.

BLOCKBUSTER VIDEO STORES

Introduction

Blockbuster Video is an American company founded in 1985. It runs a chain of rental DVDs and video games. Its head office is located in the Renaissance Tower in Dallas, in Texas.

In September 2010, the chain went bankrupt, converting most of its debt into shares. The chain was taken over in March 2011 by the Dish satellite television service (Echostar) who intends to develop its VOD service, close to a thousand stores and selling subscriptions to satellite shops that remain open. David Cook opened in 1985 in Dallas, the first video store under the name Blockbuster. He sold his rights to Wayne Huizenga and John Melk, former senior employees of Waste Management (Lorenza, 2009). After they had made the brand Blockbuster Entertainment Corporation, known nationwide and opened up a number of new stores, they sold their rights for 8.4 billion U.S. dollars of Viacom. In 1996, the company's name in Blockbuster, Inc. and changed in 2004, it was separated from Viacom.

Nevertheless, analysts of U.S. News & World Report reported that in 2009 blockbuster could come into serious financial difficulties. Blockbuster operates about 5,000 stores in the United States. Outside the U.S., Blockbuster (in part under another name) more than 3,000 stores including Canada, Brazil, Britain, Denmark, Ireland, and Australia (Ruth, 2011). Branches in Peru, Ecuador, Spain, and E1 Salvador were closed. A special feature of Blockbuster is that, in the U.S. retail stores, no pornographic films are made.

What's happened to blockbuster?

After a decade of domination of the market, the economic crisis and piracy have virtually defeated Blockbuster Video, the largest chain of stores for buying and renting movies on DVD and Blue-ray. The directors of the company, which has nearly 3,500 stores in the United States and branches, in 29 countries worldwide, announced in mid-September filed for bankruptcy, and negotiations are underway with major movie studios that, despite the bankruptcy, they continue to provide the video chain the necessary materials to continue the business (Porter, 2008). Blockbuster has lost since the crisis began, that, by early 2008, nearly a billion dollars and 920 million interest on debt that the company must pay each month are choking dell' home video mecca. To stem the losses of the company's leaders have decided to close about 800 stores in the United States and a "Pre-Planned bankruptcy," something more than the Italian courts of bankruptcy legislation.

Blockbuster last year had already closed 1000 stores in the U.S. territory, a crisis that not only has to do with the global economic downturn of that period, but ...