 Blockbuster
Blockbuster Inc. (NYSE: BBI) is the largest chain of
video game and DVD rental shops in the world.
Blockbuster Entertainment Company began as
Blockbuster Video in Dallas, Texas when it opened its first store on
October 19, 1985. The founder of the company was a 29-year-old named
David P. Cook. Cook grew the business and brought it public before
handing the reins to CEO, Joe Mitchell who quickly grew it into a
multi-billion dollar corporation. It was sold to Viacom in 1994, Joe
Mitchells' own company at a price of $8.4 billion. During the 1990s
Blockbuster bought out their major UK rival Ritz Video and changed the
name of all the stores to their own, which made them the number-one
video rental store in the country by a wide margin. In 1996, the
Blockbuster Entertainment Corporation as it was then known, was renamed
Blockbuster, Inc. and the retail stores, Blockbuster. Most older stores
have not changed. In 2000, Blockbuster entered into a 20-year exclusive
agreement with Enron to offer streaming video through Enron's broadband
network (the "Enron Intelligent Network"). The next year, the deal was
canceled, and in December 2001, Enron filed for bankruptcy protection.
Blockbuster guarantees the availability of
select titles. These titles are selected before release, determined by
volume of stock and price of stock. They become guaranteed the second
week of their release and typically stay guaranteed for two months. When
the title is out of stock the customer is given a coupon, this coupon is
good only for the guaranteed title, redeemable only at the store at
which it was received, and expires in 30 days.
The practice was briefly dropped in 2004 when Blockbuster first
introduced the "End of Late Fees" promotion. During this time there was
an ongoing problem with unreturned titles. Blockbuster was able to
secure deals with several major studios to secure more rental stock and
reinstate the practice as of early 2006. It is currently still offered.
As is the case with all Blockbuster promotions and policies, franchise
stores are not required to participate, and due to the added cost many
do not.
Blockbuster (like most other rental
stores) tends to stock more copies of new movies than older releases, in
order to capitalize on heavy consumer demand for new release titles.
Titles that are more than one year past their initial release date are
stored as "Blockbuster Favorite" (non-new release) titles. DVD non-new
releases are not officially branded as Blockbuster Favorites, but are
often referred in that manner anyway. Typically only 1-4 rental copies
are retained past the first year of release. The large volume of new
release copies are typically sold after the initial renting rush. These
copies are usually sold "previously viewed" for around $10-15, sometimes
as low as $5. Most Blockbuster locations also accept trade-ins of used
DVDs, which are sold alongside the existing stock of previously rented
movies in order to create a more robust selection of titles for sale.
Source: Wikipedia - News Reports
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