at its peak in the late 90s blockbuster owned over at 9,000 video rental stores in the United States employed 84,000 people worldwide and had 65 million registered customers once valued as a three billion dollar company in just one year blockbuster earns 800 million dollars in late fees alone a.
Fast-forward a decade and blockbuster ceased to exist having filed for bankruptcy with over 900 million dollars in debt so what happened Buster was founded by David Cooke a software supplier in the oil and gas industry after studying the potential of a video store business for a friend he.
Realized that a well franchise chain could grow through 1500 units and so the first blockbuster store opened in Dallas on October 19th 1985 according to David Cooke the opening night of that first blockbuster store was a huge success the story goes that they actually had to lock the doors because of overcrowding the thing that really set blockbuster.
Apart at that time was a huge range of titles other independent video stores could only keep track of a hundred or so movies blockbuster had an innovative new barcode system which meant that they could track up to ten thousand VHS C's per store to each registered customer which also meant that they could keep an eye on those lucrative late fees off the.
Back of this success Cooke built a six million dollar distribution center not only so that new stores could pop up quickly but also to house a huge range of titles so that each stores inventory could be tailored to local demographics in 1987 blockbuster received 18 point 5 million dollars from a trio of investors including waste management founder wayne.
Huizenga in return for voting control but after two months of intense disagreements cook left blockbuster and Huizenga assumed control under Huizenga blockbuster embarked on an aggressive expansion plan buying out existing video rental chains while opening new stores at a rate of one per day by 1988 just three years after the first store opened.
Blockbuster was America's number one video chain with over 400 stores nationwide but as Blockbuster became a multi-billion dollar company in the early 90s adding music and video game rental to its stores Huizenga was worried about how emerging technology like cable television could hurt.
Blockbusters video store model after briefly considering buying a cable company and even receiving approval from the Florida Legislature to build a blockbuster amusement park in Miami Huizenga offloaded blockbuster to media giant Viacom for eight billion dollars in 1994 in only two years under Viacom blockbuster lost half of its value blaah.
Blaah poster a new boss John antio Co focused on brick-and-mortar video stores technological innovations meant that competition was on the rise in 1997 Reed Hastings founded Netflix a dvd-by-mail rental service at the time in part after being frustrated with a $40 late fee from Blockbuster two years later having passed on an opportunity to buy Netflix.
For 50 million dollars Blockbuster teamed up with Enron to create a video on-demand service in a deal that saw Enron do most of the work a robust video on-demand platform was successfully built and tested with customers but it soon became clear to Enron that blockbuster was so focused on its lucrative video stores that it had.
Little time or commitment for the video on-demand business as a result in 2001 blockbuster walked away from the first major development of wide scale movie streaming with a few years Netflix and other competitors began to eat into blockbusters profits not by undercutting it but by reimagining video-rental.
In the digital age there's a better way to rent movies go to netflix.com make a list of the movies you want to see and in about one business day you'll get three DVDs keep them as long as you want without late fees then when you're done look prepaid envelopes return one and they'll send you another movie from your list.
Netflix all the movies you want 20 bucks a month and no late fees it took blockbuster almost 5 years to introduce its own dvd-by-mail service and even longer to scrap late fees by that time Netflix had amassed almost 3 million customers had no store overheads and was preparing to launch its revolutionary streaming service.
Blockbusters troubles continued through the mid-2000s after parting from Viacom and experimenting with in-store concepts such as DVD and game trading blockbuster was in the midst of an identity crisis in 2009 Netflix posted earnings of 116 million dollars meanwhile Blockbuster with its continuing business problems and legal battles lost 518 million on.
July 1st 2010 blockbuster was be listed from the New York Stock Exchange it's for a and T video on-demand streaming came too late and over the next three years blockbuster died a slow and painful death dvd-by-mail service is stopped its various partnerships folded and stores worldwide were rapidly plunged into.
Administration we're closed early it's 9,000 strong chain I've been reduced to one single franchise and Bend Oregon as a result of blockbusters complete shutdown one can only speculate about what could have been for the once whole movie giant they were too busy making money in their video stores to imagine a.
Time when people would no longer want or need them and in a bid to rescue their business their answer at the time was to fight fire with fire at one point they even opened up rental kiosks a little bit like a vending machine but all of these attempts were based on either outdated technology or outdated business models whereas Netflix at the time they.
Did the opposite they streamlined they were able to see the future of video rentals and then innovate for that future blockbuster they didn't seem to understand how the next generation particularly Millennials who grew up in a world without hardcopy media like DVDs and CDs how they would react to video on-demand as as technology improved and.
That's why Netflix Amazon Prime YouTube and Hulu they're still in business whilst blockbuster got left behind according to Netflix is former chief financial officer Barry McCarthy as part of the failed 2000 blockbuster Netflix buyout Reed Hastings proposed that Netflix would run the blockbuster brand online if that deal had been successful.
And Hastings had replicated Netflix's innovation for blockbuster the face of home video would likely still be blue and yellow the last ever blockbuster movie was rented on November 9th 2013 fittingly the film in question was this is the end you