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Blockbuster: Movie And Video Game Superstore

Blockbuster, the movie and video game superstore, has come to a close. It was established on October 19, 1985. In the beginning of this company’s journey, it reached a total of over 8,000 stores and almost 60,000 employees. The company was very popular, considering the low priced rentals or easy deliveries through the mail. However, over the years, there has been many obstacles standing in Blockbuster’s way that eventually ran them out of business due to bankruptcy. Blockbuster began to close certain stores in 2013, but officially closed its doors in early January of 2014.

One of the many problems that Blockbuster has faced was the newly founded company at the time, Netflix. Blockbuster had been already on its downward spiral to closing their business before Netflix has entered the picture. However, Netflix was a big contributing factor to the end of the superstore. At this rate, it was a pick and choose environment. You could go to Blockbuster and have a few hundred options of things to watch and play, or choose Netflix and receive thousands of choices. Another thing was that people were starting to grow out of going to a movie store.

They would much rather have their movie delivered to them in a matter of minutes, while also having a variety of movies or television shows to choose from. Blockbuster did have the opportunity to save their business by partnering up with Netflix, but they soon decided to decline their offer. This offer was set for Blockbuster to purchase Netflix for $50 million dollars. Instead of doing that, Blockbuster decided to make a 20 year deal with Enron Broadband Services in 2001. However, a year later, Enron filed for bankruptcy in an accounting scandal.

In effect, Blockbuster had to say goodbye to their major streaming deal. Eventually, the next year Blockbuster shared their loss of 1. 6 billion dollars towards their falling business. Overall, it was stated that, “Netflix is now a $28 billion dollar company, about ten times what Blockbuster is worth. The second obstacle that approached Blockbuster was a company by the name of Redbox. Redbox is a company that specializes in DVD, Blu-ray, and video game rentals sold at kiosks. These providers are usually located at convenience stores, fast food restaurants, grocery stores or pharmacies.

Redbox was founded in 2002, which was right around the time that Blockbuster experienced a great drop in their profits. It was known that, “The company surpassed Blockbuster in 2007 in number of U. S. locations, passed 100 million rentals in February 2008, and passed 1 billion rentals in September 2010”. The reason why people preferred Redbox instead of blockbuster was that it was more convenient. People could be at the grocery store and want a movie or video game in the spur of the moment. In that way, they have the opportunity of picking up a movie or game on the go, instead of traveling to another location.

In other words, because people are very busy and always on the move, they can see what is for sale because everything is displayed right before their eyes. The overall status of Redbox was that, “… Redbox already has 24,000 video kiosks, more than three times the amount Blockbuster has, at supermarkets and other stores, dispensing DVDs at $1 per rental”. The last reason towards the closing of Blockbuster was the location of the store itself. Blockbuster was not placed in parts of towns or cities that caught customer’s attention.

They were usually sandwiched between other businesses or hidden in corners. It was stated that, “The model was also simple/Blockbuster was reimagined as a convenience store”. This affected the coming of customers because there was nothing from the store that drew people in. In this case, people would only visit a Blockbuster store if it was the last idea they had in mind. Also, the fact that the store was identified as “simple” proves the meaning of why no one goes to the store. If a store does not have an appeal to the customer, then they will not enter the store.

If the customer does not enter the store then that is money going down the drain. Now this leads to the topic of what Blockbuster could have done, as well as the many possibilities they had to attempt these things. One of the most important ways that the company has failed was in marketing. There has not, or has been very few advertisements shown for Blockbuster. There is no way a business could grow if there is not a way that they are willing to reach out to the public. Blockbuster could have made engaging advertisements that had great low priced deals for their customers.

If I were in charge, I would have made a commercial that consists of a low priced rental movie or game with any candy that is half of its original price. I would even go further than that. I would incorporate these ads on billboards, trains, televisions, and the most important source of advertisement, social media. We live in the age of social media, so it should have been a no brainer for Blockbuster to post their sales online. In this way, many people would stumble upon Blockbuster’s advertisements. Not only will they receive more customers in their local towns or cities, but it would increase the sales for the superstore worldwide.

Another problem that could have been prevented with Blockbuster was their location. Location is very important because you must have your business in a place where people normally browse around and commonly drive by. This way, they would gain an interest of what the store is all about and what their experience with the store would be like. Many Blockbusters are not located in these kinds of areas. From personal experience, as well as browsing on Google images, Blockbusters are found in abandoned areas or they are hidden is places that are not easy to find. Not only that, but they do not have anything that captivates their audience.

This is very crucial for a business because that is what makes the customer enter the store. If it were me, I would prefer to have Blockbusters in a mall or in a local stores outlet or plaza. In this case, people are bound to enter a Blockbuster store because these locations contain many pedestrians who like to shop. Finally, the last way Blockbuster could have avoided closing their business was if they had simply made the deal with Netflix. Because of this harsh mistake, Blockbuster practically ran themselves out of business, rather than the leading competitors.

Blockbuster experienced a great and tragic snowball effect. Since they did not make the offer, Netflix left making billions while Blockbuster turned out not so lucky. The comparison between the two is very simple. Netflix is, “Watched more than any cable network/Accounts for nearly 1/3rd of internet traffic” and has a $20 billion value. As for Blockbuster, its considered “peak” was when it had 9,000 stores, 60,000 employees, and its $8 billion dollar value. Clearly there is a huge gap between the two companies and their statistics. If I were the one making the decision, I would have agreed to partner with Netflix.

I believe that having a business is all about taking risks, and if you are not taking that extra step then there is no point in trying to compete with other companies to be the best in the market. Ultimately, Blockbuster had multiple chances to get their company back together. Over the years, their business has been skating on very thin ice. It could be very possible that the creators lacked motivation and already have seen the end to their company. Or it could have been their employees who lacked enthusiasm for their customers and a strive for achievement in the company.

It is also plausible that it was a combination of both of these reasons. Either way, as a creator of a company, their ultimate goal should be to never give up or fail their business. An alternative for their problem could be to get new employees if that was the reasoning for slower profits. The company could have also given their stores a new look, so it brings in more customers. Of course any company will run into at least some trial and error. But imagine what the company would be like if there were no risks taken. The company itself will crumble apart, lose money, until eventually, it runs out of business.

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