blockbustered

For some of us, we might not realize there was a time when Blockbuster didn’t exist, let alone movie rentals! Blockbuster opened its first store in 1985. The purpose and goals of Blockbuster included the following:

* Provide a large number of copies and a big selection of movie titles to rent
* Be conveniently located with highly visible stores
* Give customers superior and consistent customer service
* Have prices that are optimized to local market conditions
* Market and advertise the Blockbuster brand name nationally
* Increase efficiency and lower costs through self-distribution.

They have kept up with modern day times and have successfully dominated the internet market. One of the successful tools in doing that was Blockbuster’s Total Access (November 2006) that combines the advantages of online rental with the advantages of in-store rentals.

Currently Blockbuster has it’s headquartered at Renaissance Tower in downtown Dallas, Texas. Blockbuster expansions has put them in locations in over thirty countries, including Canada, Mexico, Italy, New Zealand , Central America , Brazil, South America, Argentina, Uruguay, Ireland, Puerto Rico, UK , Australia, Israel, Chile, Taiwan, and Colombia.

Blockbuster began as Cook Data Services, Inc., in 1982. David Cook founded the company to supply computer software services to Texas’s gas and oil industry. The industry went bust and that meant trouble for Cook. He was searching for another source of revenue when his wife, Sandy, a movie fan, suggested changing direction and entering into the video rental business. After some extensive research, they sold the oil and gas software, and changed the video rental business using his software expertise.

CEO, Joe Mitchell is credited with turning Blockbuster into a multi-million dollar company. Viacom was the name that the company operated under until the early 1990’s. In 2002 things went down hill, the company lost 1.6 million dollars, and the losses continued the next several years.

Special programs were introduced:

* Guaranteed in Stock (2004)
* Blockbuster Rewards (1999)
* Movie/Game Pass
* Game Rush Stores-Game Stop, Game Crazy, Playboy Games (2003)
* Late fee elimination (2005)
* Price changes
* Total Access with free trial (2006)

Things started turning back around for Blockbuster and Total Access exceeded their expectations sure did help. Blockbuster has a history of adapting to the changing climate of DVD (video) rentals and it is expected that Blockbuster will continue to do so. With the addition of online rentals, it just keeps getting better and more convenient for DVD renters.

Blockbuster news
Blockbuster ends up in the news for a number of reasons from controlling executive consumption of profits to hostile takeover attempts. Here’s a little sampling from the Blockbuster scrapbook:

May 11, 2007

Blockbuster makes a bold move and gives a say on pay. That’s right, shareholders will get to decide how much of the profits will be consumed by the executives. Blockbuster may be among 50 companies to have a “say-on-pay” stockholder proposal, but they are the first to pass the proposal. In the future it is likely that more companies will be passing similar proposals. Other companies that may be right behind Blockbuster are ExxonMobile, Home Depot, Verizon Communications, Merck, and Coca-Cola. 

Executives are being shoved under the microscope more and more lately. It’s a great trend. Let some of those profits filter down to those employees that are working hard in the stores.

March 21, 2007

Blockbuster CEO, John Antioco, was locked in a war of attrition for more than a year with board member Carl Icahn. When all was said and done, Antioco left a year early, ended up with about a third of what he was expecting, and cannot speak to the press about any of it. 

What started it all was Blockbuster’s 28% drop in earnings in 2006. At 71 years old, Icahn lead the board in offering Antioco a reduced bonus-only $2.8 million instead of the promised $7.6 million. I sure hope the poor guy will be able to still put food on the table with such a measly bonus!

November 2006

Blockbuster brushes itself off from the previous rejection from Hollywood Video and finds a new date! Blockbuster pairs up with the Weinstein company and announced a three-year deal that give the video renting company exclusive rights for rentals starting on January 1, 2007. Too bad exclusiveness went unfulfilled (I know their pain). With the First Sale Doctrine, other rental companies were able to rent the movies, too!
January 10, 2006

Blockbuster’s competitor, Hollywood Video, agrees to a buyout to the Dothan, Alabama-based company, Movie Gallery. Blockbuster ends up the odd man out when the two become an item and pair up.

December 2004

Blockbuster stated it would seek to buy out their competitor, Hollywood Video, and would do so by hostile takeover if necessary. So far, Hollywood Video has refused to negotiate a sale with Blockbuster. I guess it’s not enough to be number one, Blockbuster wanted to make sure they maintained their superior position by eliminating number two.

The recurring news with Blockbuster is that they keep pushing forward and they rise back up when circumstances knock them down.