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From 9000 locations to just one.The last blockbuster (what happened?)

The untold story of the blockbuster from 9000 locations to one.The last blockbuster (what happened?) what could blockbuster have done differently?closed in 2020?

The Netflix didn’t kill the blockbuster the company did it to itself.

The first-ever blockbuster was opened on 19 October 1985 in Dallas, Texas by David cook.

Throughout the ’90s and early 2000s, 

Before there was NETFLIX, AMAZON PRIME, HOTSTAR, there was Blockbuster.

Blockbuster was the video-rental company in the US, The top video-rental company in the US unfortunately it didn’t last forever. (A video rental shop/store is a physical retail business that rents home videos such as movies, pre-recorded TV shows, video game discs, and other content.)

In 2000, the founder of Netflix Reed Hastings visited Dallas to propose a partnership to Blockbuster CEO John Antioco and his team.

They proposed that Netflix would run blockbuster’s brand online and Antioco’s firm would promote Netflix in its stores.

However, Hastings got laughed out of the room. In the end, other powerful services came up and the blockbuster went bankrupt in 2010. As of today, just one store remains in Bend, Oregon.

Here’s what happened From 9000 locations to just one. The last blockbuster’s 35-yr history in movie-rental Business.

How the first blockbuster came into business?

Before Blockbuster David Cook founded a “cook data service” company whose goal was to provide software services to oil and gas industries all over Texas. but for David, it didn’t work well. 

Soon after that, he decided to enter the video business, he bought a video store franchise in Dallas known as video works. David cook wanted to decorate the interior of his store with a blue and yellow design but Video works rejected his request.

As we all know what happened next, The first blockbuster store opened on October 19, 1985, in Dallas, Texas. when the cook realized the huge potential in video rentals. Cook left the oil industry and began franchising the blockbuster store.

His company was different from the other retail stores because it offered customers a selection of 8000 VHS tapes and 2000 beta tapes with the help of a modern, computerized check-out process, while other small retails stores only offered a couple of hundred movies to their customers. Cook’s earlier experience of managing huge databases played a huge role in blockbuster success.

Blockbuster expansion and its market needs

After a year, David Cook expanded the blockbuster by opening three more stores. During that time, rental stores, like blockbusters, were the main way individuals could watch films that had left theaters without buying the VHS tapes themselves.

In 1987, Waste Management co-founder Wayne Huizenga, who initially had second thoughts about entering the video rental industry, consented to obtain a few Blockbuster stores.

At that point the number of stores was 19, pulling in Huizenga’s partner John Melk’s consideration because of its effectiveness, family-accommodating picture, and plan of action.

Huizenga and Melk used strategies from their waste business and Ray Kroc’s(McDonald) model of extension to quickly grow Blockbuster, and soon they were opening another store at regular intervals(every 24 hours).

In 1987, Three major investors took blockbuster to the next level. They invested $18.5 million in the blockbuster. Soon thereafter, Cook left the company, as the headquarters moved to Fort Lauderdale, Florida.

Under new administration In 1988

Under a new administration, the organization purchased up local video stores and opened new ones under the Blockbuster branding. In 1988, blockbuster became the top leading video-store chain in the US with 800 stores.

Blockbuster 1000th store 

In the 90s blockbuster reached a milestone when it opened its 1000th store.

In 1992, the company also expanded overseas when it brought out video-rental chain Ritz in the UK. During that time Blockbuster had 2800 stores.

In 1994, the blockbuster was sold to Viacom for $8.4 billion. After 5yr, Viacom Took blockbuster public, as the store number reached 6000 globally. 

In 1997, At the point when DVDs were arising as the new video medium. Warner Bros. offered CEO John Antioco an exclusive deal. 

Blockbuster was to have rights to lease new DVD releases for a while before they went on sale to the general public.

The studio was to get 40% of rental incomes consequently, which was a similar arrangement effectively set up for VHS rentals.

Blockbuster turned the proposal down, and the studio reacted by bringing down its DVD discount cost to rival the rental business.

Blockbuster’s future competitor, NETFLIX Was Founded in 1997

Trouble was on the horizon in 1997 for blockbuster as Netflix was founded on 29 august 1997. Netflix was a big nuisance for the blockbuster. 

As blockbusters used to charge customers a fee every day they were late returning a movie rental. Late fees eventually became the main source of blockbuster’s profits.

In fact, Blockbuster said they used to make $800 million in late fees or 16% of its revenue. 

These were the main reasons that disappointed numerous clients, including Netflix founder Reed Hastings. Reed said he founded Netflix because he hated to pay a $40 fine.

In its beginning phases, Reed’s organization, which had no late charges, would send DVDs directly to your home for a flat monthly rate.

Netflix’s original ad campaign, “The end of late fees, “was pretty much all they needed to say.  When Netflix announced the end of late fees, word of mouth took care of the rest.


10 reasons why blockbuster failed.

  1. In 2000, Blockbuster committed the first mistake that would ultimately lead to its downfall. The company decided not to buy Netflix. Blockbuster considered buying the popular Netflix service for $50 million. However, the organization chose to not make the purchase.
  1. Blockbuster sat atop the video rental industry. With massive marketing budgets, thousands of rental locations, millions of customers, they were dominating the competition
  1. So, it’s not surprising that blockbuster current CEO Antioco and his team refused to simply hand over the brand they had worked so hard to build. 
  1. However, Netflix founder Reed Knew blockbuster had a weakness in their business model. Which was not clear to blockbuster at that time.
  1. The ugly truth – Blockbuster used to earn a huge amount of money by charging its customers late fees, which had become a major part of blockbuster’s revenue model.


  1. Their profits were highly dependent on customers’ late fees.
  1. Netflix used this opportunity to their advantage instead of charging to rent videos.

It offered subscriptions, which made annoying late fees pointless

  1. To compete with Netflix, Blockbuster would have to change its business model while damaging its profitability.
  1. It was calculable that it would price the corporate $200 million to stop grouping late fees and another $200 million to begin the new venture, Blockbuster Online.

 Despite all the ups and downs, Blockbuster was at its peak in 2004.

  1. That same year, 
  • It had 9,000 stores globally 60,000 employees and earned $5.9 billion in revenue
  • Viacom parted ways with the blockbuster.
  • The company launched blockbuster online, but it was already 

Sadly Blockbuster era came to an end(From 9000 locations to just one.The last blockbuster)

In a Forbes report, Between 2003 – 2005, the company market value declined by 75%.

However, In 2010, a Once-famous video rental company filed for bankruptcy in an attempt to wipe out $1 billion of debts.


Dish Network came forward to purchase the company out of bankruptcy for $320 million in hopes of keeping 600 stores open.

At the time, there were only 300 blockbuster stores still in operation.

Now In 2020, it’s just one store. world’s last remaining Blockbuster video store 

Its located in Bend, Oregon 

If you’re a resident of Deschutes County, Oregon. you could host a slumber party in the world’s last remaining Blockbuster video store.

What could a blockbuster have done differently?

First of all, blockbuster would have, 
  • asked customers about their feedback and would have tried to implement some of the legit ways that would have been in good faith for both customers as well as a company.
  • offered films for sale alongside rental.
  • tried to shift the company’s huge profits that came from late fees to something else(obviously not immediately as we know it would be a disaster but at least on a small scale one step at a time ). At Least Tried on 5-6 stores and then moved on to other stores if worked.
  • Would have grabbed the opportunity to buy Netflix.( we know what you are thinking, “it’s easy to say now but at that time blockbuster didn’t know Netflix will be the next big sensation in the market.” ) My point is that if I had an opportunity to buy a company and that company is serving the market needs. I would not ignore the market needs regardless of anything else would have taken the risk and brought that company.



Finally, Globally famous blockbuster From 9000 locations to just one,came to an end, The last blockbuster still remains because of its loyal customers.

Thanks for reading, I hope you enjoyed reading the case study.

If you were the CEO of blockbuster at that time what you would have done differently comment down below… 

Also read :- Case Study on Urban ladder And Reliance Deal 

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"Aman is a Co-founder of Monyoversee | Digital marketer | Freelancer (on-page SEO, Content Writer, and Social Media). Pursuing Under Graduation (B.Com) from Patna University. A blogger at day and a reader at night. He has experience in reselling and making money online and shares his experience about his personal financial life and the book he peruses with the help of a blog. You can find Aman on LinkedIn."
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