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Blockbuster LLC

Blockbuster LLC, formerly Blockbuster Inc., is an American-based provider of home video and video game rental services, originally through video rental shops (both owned and franchised), later adding DVD-by-mail, streaming video on demand, and kiosks. At its peak in 2009, Blockbuster had up to 60,000 employees.[1] There are around 1000 Blockbuster stores in the U.S. with locations in 17 countries worldwide. It is headquartered in McKinney, Texas.[2] Because of poor strategic planning and mismanagement as well as competition from other video rental companies such as Netflix, Blockbuster has undergone significant revenue losses. The company filed for bankruptcy on September 23, 2010,[3] and on April 6, 2011, was won by satellite television provider Dish Network at auction for $233 million and the assumption of $87 million in liabilities and other obligations.[4] The acquisition was completed on April 26, 2011.[5]



1980s: early years

The first Blockbuster store opened October 1985 in Dallas, Texas at the corner of Skillman and Northwest Highway.[6][7] The founder of the company was David Cook, who grew the business and brought it public. The innovation was derived from Cook's experience with managing huge databases. After the first few stores opened, he built a $6 million warehouse in Garland, TX, that could pull and package multiple stores in a day. Key to the early success of Blockbuster was their ability to customize a store to its neighborhood, loading it up with films geared specifically to demographic profiles in addition to the popular new releases, and a sizable collection of catalog titles.[8] The logo was created by Lee Dean.

In 1987, the company won a court case against Nintendo of America, Inc, which paved the way for the rental of videogames.[9]

Scott Beck, a young businessman in Dallas, approached John Melk, prior executive with Waste Management, about buying a franchise. Melk brought the idea to his friend and business associate, Wayne Huizenga, who agreed to buy the company after overcoming initial concerns about the video industry.[10]

Huizenga and Melk used similar techniques in growing Waste Management, and soon, they were opening one store every 24 hours.[11] They also bought every Blockbuster franchise they could get their hands on (removing pornographic movies). At the helm, Huizenga spent the late 80s acquiring several of Blockbuster's key rivals most notably Major Video.

1990s: growth and acquisition by Viacom

A Blockbuster store in Durham, North Carolina. In 1990 Blockbuster bought Mid-Atlantic rival Erol's with over 250 stores. In 1992, Blockbuster acquired the Sound Warehouse and Music Plus music retail chains and created Blockbuster Music.

The company became a multi-billion dollar company and in 1993 proposed a merger with Viacom. However, after both companies' stocks tumbled in 1994, Viacom eventually purchased Blockbuster for $8.4 billion.[12][13]

The Blockbuster Block Party concept was test-marketed in Albuquerque, New Mexico and Indianapolis, Indiana during the year 1994. It was an "entertainment complex" aimed at adults, containing eight themed areas housing a restaurant, games, laser tag arena and motion simulator rides and was housed in a windowless building the size of a city block.[14]

During the 1990s, Blockbuster expanded in the United Kingdom by purchasing that country's Ritz Video chain. The stores were rebranded to Blockbuster, making it the number one rental chain in that country.

In 1994, Blockbuster acquired a stake in Spelling Entertainment Group, a media company run by television producer Aaron Spelling. Viacom increased its stake in Spelling over the years, finally taking full ownership in 2000.

In 1996, the Blockbuster Entertainment Corporation was renamed Blockbuster, Inc. and the retail stores, then called Blockbuster Video, were renamed Blockbuster. Older stores have not changed. During that year Blockbuster, which was then headquartered in Fort Lauderdale, Florida, began studying the idea of moving its headquarters into the Renaissance Tower in Downtown Dallas.[15] In November 1996 Blockbuster confirmed that it was moving into the Renaissance Tower.[16] Most of the workers at the Florida headquarters did not want to relocate, so Blockbuster planned to hire around 500 to 600 new employees for its Dallas headquarters. The company had offered various relocation packages to all of its Fort Lauderdale employees.[17] In 1998, Blockbuster created DEJ Productions which acquired 225 films primarily to provide exclusive content to its Blockbuster stores prior to being sold off to First Look Studios in 2005.."[18] During that same year, Blockbuster bought the Irish video rental store xtra vision, with over 200 stores in Ireland and the UK. In 2009, Blockbuster sold off their Irish operations to Birchall Investments, with the few xtra vision stores in the UK being rebranded as Blockbuster.

In August 1998, Viacom sold the Blockbuster Music chain to Wherehouse Entertainment, who was subsequently purchased by Trans World Entertainment in 2003.[19]

2000s: further acquisions and independence from Viacom

Blockbuster DVD-by-mail envelope.

In 2002, Blockbuster acquired Movie Trading Company, a Brooklyn chain that buys, sells, and trades movies and games, to study potential business models for DVD and game trading. Also that year, they acquired Gamestation, a 64 store UK computer and console games retailer chain.

Blockbuster separated from Viacom in 2004 and launched Game Pass nationwide. Online DVD subscription was introduced on (aka Blockbuster Online).[20] Blockbuster also rolled out its Game Rush store-in-store concept to approximately 450 domestic company-operated stores. Blockbuster began game and DVD trading in select US stores.[21]

In May 2005, financier Carl Icahn waged a successful proxy fight to add himself and two other members to the board. Icahn accused Blockbuster of overpaying Chairman and CEO John F. Antioco, who served in that capacity since 1997, who received $51.6 million in compensation for 2004. Icahn was also at odds with Antioco on how to revive profit at Blockbuster; Antioco scrapped late fees in January, started an Internet service, and wanted to keep the company independent, while Icahn wanted to sell out to a private equity firm.[22] In 2007, Antioco left the company, reportedly due to continued controversy over his compensation. He left with a $24.7 million severance package.[23]

On July 2, 2007, the company named James W. Keyes (former president and CEO of 7-Eleven) as the new chairman and CEO. He introduced a new business strategy that included de-emphasizing the unprofitable Total Access online service, in favor of an in-store, retail-oriented model. His predecessor John F. Antioco attempted this same plan initially in 1997. Additionally, Blockbuster Inc. lifted the ban on using check cards to secure rentals of movies and games in excess of the per-visit check out limit. Customers who were once required to use a major credit card are now free to use their check card.

On September 14, 2007, Blockbuster GB Limited bought a number of retail stores from ChoicesUK Plc. ChoicesUK is an AIM listed multi-channel distributor and retailer of DVDs, computer games and CDs. The sale secured employment for approximately 450 employees across 59 stores in the UK. As part of the transaction, Blockbuster GB decided to re-brand the stores as BLOCKBUSTER.

On February 17, 2008, Blockbuster proposed a buyout of struggling Circuit City. However, after a due diligence review of Circuit City's financial books by Blockbuster (pushed for by Carl Icahn), Blockbuster withdrew its offer in July 2008. Analysts were not favorable to the proposed deal, viewing it as a desperate effort to save two struggling retailers rather than a bold turnaround initiative.[24] It even earned CEO James Keyes a spot on Jim Cramer's Mad Money Wall of Shame before the offer was withdrawn. Subsequently Circuit City filed for bankruptcy on November 10, 2008 and after liquidating all its stores ceased operations on March 8, 2009.[25]

2010s: bankruptcy and acqusition by Dish Networking

A Blockbuster store in Moor Allerton, Leeds, UK. On February 10, 2010, Blockbuster announced that it would cease all its operations in Portugal, closing down in the process 17 outlets and leaving over 100 workers unemployed. Blockbuster representatives in Portugal blamed Internet piracy and the lack of government response to it as the key factors to the company's bankruptcy in the country.[26] By March 2010, Blockbuster was in talks of selling its European operations altogether, but would not disclose the details.

On March 1, 2010, Blockbuster began "Additional Daily Rates," or "ADRs," for rentals not returned by their due date in the United States, having already used this procedure in other countries such as the UK for many years. An "Additional Daily Rate" was charged for each day a member chooses to keep the rental beyond the rental terms.

On March 12, 2010, PricewaterhouseCoopers, Blockbuster's independent registered public accounting firm, issued its audit opinion disclosing substantial doubt about Blockbuster's ability to continue as a going concern. This report was included in Blockbusters's 10-K SEC filing. On March 17, 2010, Blockbuster issued a bankruptcy warning after continued drops in revenue threatened its ability to service its nearly 1 billion dollar debt load.[27]

By April 1, 2010, Carl Icahn had resigned from Blockbuster's board of directors and sold nearly all his remaining Blockbuster stock.[28]

On May 2010, Movie Gallery began to liquidate, leaving Blockbuster as the only remaining national video rental chain in the United States.[29] During the same month, a dissident shareholder, Gregory S. Meyer, in an effort to be elected to Blockbuster's board of directors, engaged in a proxy battle with Blockbuster's board alleging that the board has been responsible for significant destruction of value to shareholders. Mr. Meyer was elected to the board at Blockbuster's shareholder meeting in Dallas, Texas on June 24, 2010.

On July 1, 2010, the company was delisted from the New York Stock Exchange after its shareholders failed to pass a reverse stock split plan aimed at heading off involuntary delisting due to the share price trading well below $1 per share.[30] The stock then traded on the over-the-counter bulletin board (OTCBB).

In addition, Blockbuster was unable to make a $42.4 million interest payment to bondholders and was given until August 13, 2010 to pay off the debt. The company hired Jeff Stegenga to be its chief restructuring officer (CRO) in an effort to satisfy bondholder demands and recapitalize the company. After failing to pay on August 13, bondholders gave Blockbuster until September 30, 2010.

On August 26, 2010, news media reported that Blockbuster was planning on filing a pre-packaged Chapter 11 bankruptcy in mid-September. In light of this news, the company's chief financial officer (CFO), Tom Casey, resigned on September 11. He was replaced by Dennis McGill, formerly CFO of Safety-Kleen Systems, Inc.

On September 22, 2010, a source close to Blockbuster announced they would be filing for Chapter 11 in a few days time. It was carrying some $900 million in debt.[31]

On September 23, 2010, Blockbuster filed for Chapter 11 bankruptcy protection due to challenging losses, $900 million in debt, and strong competition from Netflix, Redbox, and video on-demand services. Blockbuster lagged behind these competitors in online rentals, Redbox-style kiosks, and streaming video.[32] Movie Gallery/Hollywood Video had filed for Chapter 7 bankruptcy liquidation earlier in 2010 for similar reasons.[33]

At the time of Chapter 11 filing, Blockbuster said they would keep their 3,300 stores up and running;[34] however, the company was expected to close over 900 stores by the end of 2010. In December 2010, Blockbuster announced it would close an additional 182 stores by the end of April 2011 in attempts to emerge from bankruptcy.[35] It was reported in February 2011 that Blockbuster and its creditors had not come up with a Chapter 11 exit plan and that the company would be sold for $300 million or more, along with taking over debts and leases.[34] Blockbuster has stated that there is the possibility that they may not be able to meet financial obligations required under its Chapter 11 filing, a circumstance which could mandate conversion of the bankruptcy filing to Chapter 7 (liquidation).[36]

On March 1, 2011, the U.S. Department of Justice filed a claim disclosing that Blockbuster does not have the funds to continue reorganizing and should liquidate.

In April 2011, Blockbuster's landlords objected to its assumption of leases that it seek to assign to soon-to-be-owner Dish Network Corp., saying among other things, they did not have adequate assurance that the new owner would honor those leases.[37]

On August 31, 2011 the liquidators announced the closure of the remaining 253 Canadian stores and wind up the entire Canadian unit.[38]

On March 28, 2011, South Korean telecommunications company, SK Telecom, made a surprise bid to buy Blockbuster.[39] Dish Network had also expressed interest in bidding; as did Carl Icahn, despite calling Blockbuster "the worst investment I ever made."[40] Dish eventually won the auction on April 6, 2011, agreeing to buy Blockbuster for US$320 million.[41] On April 19, 2011, it was announced that Dish would only keep 500 Blockbuster stores open. At its peak, Blockbuster had more than 4,000 stores nationwide.

In April 2011, Dish Network told the U.S. Bankruptcy Court that it needed more time to negotiate with landlords in an effort to keep more than 600 Blockbuster stores open.[42] The deal was finalized on April 26, 2011.

In January 2012, on Friday 13th, Clayton (Dish CEO) announced that while Dish originally planned to keep 90 percent of the stores in operation (roughly 15,000 employees got to keep their jobs), due to market factors Clayton says he still wants to keep the Blockbuster chain going but, there are ones that aren't going to make it. We will close unprofitable stores. We will close additional stores. Clayton did not say when these additional closings would happen and only remarked that some stores were not turning a profit. The Dish chief would not say which stores the company was planning on closing, but that they were looking at each potential closing on a case by case basis. Some districts are reporting that over half of their store operations have been notified that they will stop renting on Jan 23, and will accept rental returns from Jan 24 until doors shutter mid February, leading to the end of the rental business. Blockbuster has not given the Online Distribution Employees a rate increase since 2007, not even a cost of living increase. [43]

Senior Management

  • Michael Kelly, President: 2011 Present
  • Dennis McGill, Executive Vice President and Chief Financial Officer: 2010 Present
  • Kevin Lewis, Senior Vice President and Chief Marketing Officer: 2008 Present
  • Greg Nichols, Senior Vice President of Human Resources: 2011 Present

Chief Executive Officers

  • James W. Keyes 2007-2011
  • John F. Antioco 1997-2007

Current Board of Directors

  • None as of 2011

Business model

Blockbuster Video in Springboro, Ohio. This store is no longer in business. The standard business model for video rental stores was that they would pay a large flat fee per video, approximately US$65, and have unlimited rentals for the lifetime of the medium itself. Sumner Redstone, whose Viacom conglomerate then owned Blockbuster, personally pioneered a new revenue-sharing arrangement for video, in the mid-1990s. Blockbuster obtained videos for little cost and kept 60 percent rental fee, paying the other 40 percent to the studio, and reporting rental information through Rentrak. What Blockbuster got out of the deal, besides a lower initial price, was that movies were not available for sale during an initial release period, at least at an affordable price point customers either had to rent, wait, or buy the film on tape at the much higher MSRP targeted at other rental chains and film enthusiasts, at that time then between $70 100 before the end of the initial release period.

Quantity and selection of titles

Blockbuster, like most other rental stores, tended to stock more copies of new movies than older releases, in order to capitalize on heavy consumer demand for new release titles. The trade term is "depth of copy".[44] Titles that are more than 12 months past their initial release date were stored as "Blockbuster Favorite" (non-new release) titles. Typically only one to four rental copies of each title were retained past the first year of release. The large volume of new release copies were typically sold after the initial renting rush. Some of these copies were sold as "previously viewed" for around $10 $15, sometimes as low as $3.99. Most Blockbuster locations also accepted trade-ins of used DVDs which are sold alongside the existing stock of previously rented movies.

Representing itself as a family-friendly chain, Blockbuster never rented nor sold pornographic titles in the US market (other markets vary), though the stores carried R-rated and unrated films, including a large number of "soft porn" titles (including Red Shoe Diaries. Red Shoe Diaries was distributed exclusively by Blockbuster in a now expired agreement with then-sister cable network Showtime during the Viacom era). Blockbuster required employees to check ID and did not allow rental of Youth Restricted Viewing titles with a rating over R to children under 17 unless their parents have specifically allowed it through a family account.

Blockbuster was the exclusive rental chain for The Weinstein Company movies since January 1, 2007,[45] although due to the First Sale Doctrine, other rental stores and online DVD rental-by-mail companies, like Netflix, could still rent DVDs released by The Weinstein Company.

Adoption of Blu-ray

On June 19, 2007, after a pilot program launched in late 2006, Blockbuster announced that it had chosen Blu-ray over HD DVD rental format to rent out in a majority of its stores. In the pilot program, Blockbuster offered selected titles for rental and sale in 250 stores. Blockbuster stocked Blu-ray titles in almost 5,000 stores across the United States, Canada, United Kingdom, Mexico and Australia.[46]

Retail operations

At the beginning of 2010, Blockbuster had over 4 000 US stores and 2 500 international stores.[47] In the United States, it planned to close between 810 and 960 retail stores and instead launch as many as 10 000 "Blockbuster Express" video rental kiosks by the middle of 2010.[48] It had been claimed that there are more than 43 million U.S. households with Blockbuster memberships.[49]

In December 2004, Blockbuster announced it wanted to pursue a hostile takeover of Hollywood Video, its major U.S. competitor. In response, Hollywood Video agreed to a buyout in January 2005 by a smaller competitor, the Dothan, Alabama-based Movie Gallery. Since then, Movie Gallery has filed for bankruptcy twice and the entire chain of stores was liquidated.

On December 18, 2007, a store in Dallas was renamed Blockbuster Media.

In March 2010, Blockbuster paired up with Time Warner Inc. to have Warner Bros. movies be available in Blockbuster stores on the DVD release date and not be subject to a four-week delay in availability. Similar agreements were also made with Universal and 20th Century Fox. Also in 2010, Blockbuster shuttered 545 operated stores in the 2010 fiscal year.

Blockbuster Express

Blockbuster LLC licensed its brand to self-service kiosk maker NCR. About 10,000 Blockbuster Express self-service movie rental kiosks are operational in 2011.[50] It competes with Redbox movie rental kiosks made by Coinstar. In February 2012, news began to circulate that Redbox owner Coinstar purchased Blockbuster Express DVD rental kiosks for $100 million.[51][52]


GameRush store at a Blockbuster in Blue Ash, Ohio. In Summer 2003, Blockbuster started converting select stores in select regions to GameRush stores. These stores sold and bought consumer DVDs, games, gaming systems, and accessories. It was offered as a direct competition to stores such as GameStop and Game Crazy. Blockbuster used their location status to get instant coverage; it also promoted these stores by hosting video game tournaments, special trade-in offers, and a more "hip" look to the selection and staff. However, when Blockbuster introduced "The End of Late Fees" GameRush was put on the chopping block. In April 2007, GameRush stores were reduced back to just a games section.

Blockbuster UK operated Trade functions in all their stores, buying in and selling preowned consoles, DVDs games and accessories with customers, and pricematching with other high street competitors by offering either store credit against other purchases, or cash for trade ins.


A Blockbuster Video store in Australia. A Blockbuster store in Moncton, New Brunswick, Canada, which featured the 1985-1997 logo. It has since closed. In Australia, the company pursued a franchising model whereby its corporate stores, which peaked at 133 in 1998, were converted into franchises. The company also disbanded its chain of Game Rush video game stores, presumably as a part of the U.S. headquarters strategy to focus on core rental business. Metropolitan Victoria (Melbourne) was the last remaining significant concentration of corporate stores. In February 2007, Blockbuster announced plans to sell its Australian subsidiary and franchising rights to Video Ezy, subject to approval from the Australian Competition and Consumer Commission. Blockbuster's Australian operations encompassed 29 company-owned stores and 341 franchises, which Video Ezy would continue to operate using the Blockbuster brand.[53] On June 29, 2007, The Hollywood Reporter announced 282 US stores would close that year.

Blockbuster announced that it plans to shut down its stores in Peru due to poor revenues, which it blamed on the effect of movie piracy.[54] The company has already closed down its stores in Ecuador, Spain, Portugal and El Salvador.

In Canada, Blockbuster Canada had operated independently, and it initially remained financially stable.[55] It began a partnership with Wind Mobile in December 2009, selling mobile phones at all stores in cities where Wind's service was available. Phone sales began in Toronto and Calgary, later expanding to other cities with Wind coverage. Some stores even featured a full Wind "store-in-a-store" for postpaid activations and a larger selection of devices.[56] However, on May 3, 2011, it was announced that the company had gone into receivership.[57] On May 25, 2011, it was announced that 146 stores, accounting for approximately 35% of the company's stores in Canada, would be shut down effective June 18, 2011. On August 31, 2011, Blockbuster Canada announced that no buyer could be found for its remaining stores that were acceptable to the court-appointed bankruptcy receiver, and that it would wind down operations and close all stores by December 31, 2011. The company had acted as a guarantor towards Blockbuster's remaining debt.[58]

In March 2010, Blockbuster announced that it intended to sell all operations in Europe. The company once had an Irish subsidiary, Xtravision, which did not operate under the Blockbuster brand name. Blockbuster sold Xtravision at a loss in August 2009 to Birchhall Investments Limited.

Online rentals

Current Blockbuster Online "Total Access" logo (2006-present) Former Blockbuster Online logo (2004 06)

United States

In August 2004, Blockbuster introduced a DVD-by-mail service in the U.S. to compete with the established market leader, Netflix.[59]

Blockbuster's U.S. online operation started with around 10 warehouses; further expansions every year brought that number to 41, plus 1400+ stores in the Blockbuster Online network. Most Blockbuster independent franchises did not honor the Total Access program. The company had 1.5 million subscribers at the end of the third quarter of 2006.[60] Blockbuster's move to follow the business pattern with its online rentals as was established by Netflix prompted Netflix to sue Blockbuster for patent infringement. Blockbuster counter sued with a counterclaim alleging deceptive practices with its patent which it alleges was designed to maintain an illegal monopoly. The suits were eventually settled, and while the terms were not disclosed it was later reported that Netflix recorded a settlement payment from Blockbuster of $4.1 million in the second quarter of 2007.[61]

Blockbuster offered several online movie rental plans. In select cities customers could add games to their movie rental queue as if they were included in their plan, but game rentals resulted in a separate additional fee which was not displayed or charged until the end of the billing cycle.[62] Until July 26, 2007, Blockbuster offered and advertised unlimited free in-store exchanges of online rentals with all plans, included free of charge. Since then there were several changes back and forth with regard to this policy; as of March 2010 customers were allowed a limited number of in-store exchanges.

At the end of 2006, Blockbuster Total Access had 2.2 million customers, exceeding their original goal of 2 million, according to the official website.[63] After an aggressive media campaign that accounted for much of Blockbuster's $46.4 million net loss in the first quarter of 2007, the Total Access subscriber base surpassed 3 million customers in total, marking the company's highest subscriber growth quarter ever.[64] By 2009, however, the company was declining to provide figures when asked by the Wall Street Journal.[65]

On January 5, 2007, Southern Stores Inc, one of Blockbuster's largest franchise operators in the United States, filed a lawsuit in federal court alleging that, by introducing Blockbuster Online and Blockbuster Total Access, the rental chain has undercut the group's franchise agreement.[66]

On August 6, 2010, Blockbuster By Mail subscribers gained access to Blockbuster's library of console games, in addition to movies and television shows.

In August 2011, Netflix raised their prices and began losing customers to Blockbuster. In September 2011, CEO, Reed Hastings, announced that Netflix would split its DVD-by-mail service and its streaming-video service into two companies. Netflix has since abandoned plans to split the services in two. [67] The new DVD-only company, called "Qwikster," was to be completely separate from the streaming business. Hastings ultimately expressed contrition for the way the planned changes. [68]

United Kingdom

In the UK, Blockbuster had been providing a version of online rentals since October 2002 with its "Pay Per Rent" service.[60][69] This was more like a postal version of store rentals than the traditional online DVD rental subscription model, with per-rental prices of 3.50 4.50, with a rental period of five nights (usually Monday-to-Friday, not including postal delivery times), and late fees ( 0.70 0.90 per disc).[70]

In May 2004, Blockbuster also introduced a conventional online subscription service. The unlimited three-disc plan is 14.99/month. Unlike the US service, there was no in-store disk exchange. There are a total of 600 Blockbuster stores in the U.K.

In April 2005, Blockbuster UK started trialing a combined online and in-store rental program known as 'OnlineXtra'. This entitled customers paying an extra 2 online each month to rent two additional movies in-store (sent to them via the post). This program was discontinued in 2006, with those on onlineXtra plans moved over to traditional online-only rental packages.

In early 2008, Blockbuster UK launched a new version of onlineXtra, which allowed customers to print vouchers to use in Blockbuster stores. These onlineXtra plans are still available.[71]

2008 was a big year for Blockbuster UK; the website was completely overhauled, improving navigation and user experience. Store customers were given a full interactive section so that they could properly track what was in their local Blockbuster store, while online users were treated to a radical overhaul of the rental section on site which introduced innovative new browse pages such as Browse By Theme and Browse By Year. Upon seeing the new site, independent DVD rental comparison site Choose DVD re-reviewed the site - "The Blockbuster DVD rental site - from where you'll be making your DVD rental selections - is sporting a brand new design which... is a world away from the clumsy mess of its former incarnation which tried to balance the high-street business alongside the online DVD rental options with a mish-mash of slipshod and heavy graphics that made the site more than a little bit of a pain to use regularly.

Now with the new, easy-to-use design the rental service is simple to navigate around and offers plenty of added extra's for anyone looking for inspiration about what to rent." "More importantly though, Blockbuster DVD rental pretty much leads the pack when it comes to customer satisfaction and title turnaround putting them at the very pinnacle of the UK's DVD rental market."[72]

Late in 2008, following in the footsteps of the stores, Blockbuster UK added a buy online section to the site - allowing Blockbuster online members to buy new Blu-rays discs and games.[72] This was expanded to include other categories in 2009 and 2010.[73] In 2009, this was integrated with the store base, allowing any customer visiting a Blockbuster High Street store in the UK to access the entire range of movies and games sold online. Paying in-store for the item.

In 2009, Blockbuster expanded its range of exclusive titles both online and in-store - boasting Hollywood heavyweights like Gran Torino, Changeling, Taken and Knowing alongside more arthouse, award-winning pictures such as Che Parts 1 and 2, The Young Victoria and 50 Dead Men Walking. Blockbuster has exclusive titles available each and every month, so Blockbuster customers can enjoy top movies before the likes of other High Street brands like HMV, Play and LOVEFiLM.[72]

In November 2009, Blockbuster UK became the only rental company to be able to rent titles from Universal Pictures online, giving them a big advantage over their competitors such as Netflix and LOVEFiLM.

In January 2010, Blockbuster UK launched an online blog, bringing together editorial content with public-facing announcements, following in the steps of its US cousin. The blog was added to the Blockbuster UK website soon after launch with readers of its This Week and Cinemascape articles redirected to the blog.[74]

In April 2010, Blockbuster UK upgraded its website with improved search algorithms and improved product pages. It also launched Facebook, Twitter and YouTube channels. Customer responses to the blog that announced the changes were generally quite positive.[75]

In May 2010, Blockbuster UK introduced a monthly video show called the BB Insider. It lasted for eight episodes before being discontinued and replaced with weekly video roundup in January 2011.[76] In the same month, they announced that they were working on an iPhone App for online subscribers.[77] Images of the app were subsequently leaked on the Blockbuster UK Facebook channel prior to the planned September 2010 launch.

In June 2010, Blockbuster UK expanded its onlineXtra program to provide additional benefits to all online subscribers, with all online rental subscribers able to rent for 1.50 in any Blockbuster store and get 10% off when they buy in the store.[78] In February 2011, Blockbuster UK announced that they had changed their policies for online vouchers - allowing customers to show the voucher to be scanned in the store on smart phone and tablet devices.[79]

In September 2010, Blockbuster UK launched a Click & Collect service for store customers - allowing Blockbuster High Street shoppers to reserve movies in-store via the Blockbuster website before collecting them from a Blockbuster store.[80]

In January 2011, Blockbuster UK launched a new weekly email newsletter called Blockbuster Showcase. There are two versions sent out every Monday - one for online subscribers and one for store customers.[81] In the same month, Blockbuster UK announced the launch of new rental pages at Blockbuster UK, with an improved Cinema experience.[82]

In February 2011, Blockbuster UK announced price drops in all 600 Blockbuster stores in the UK along with a new Blockbuster loyalty card program.[83] These price drops were followed by a price drop of the Blockbuster UK online pay per rent service.[84]

In April 2011, Blockbuster UK announced the launch of 'Top Ticket', a new feature of their online rental service allowing online rental customers to 'GUARANTEE' their next movie. Available free for all Blockbuster unlimited rental subscribers, all Unlimited rental plans get at least one Top Ticket each month.[85] This makes Blockbuster UK the first rental service to offer this type of guarantee in the world. Customer reaction was mixed, with some customers feeding back positively about the new feature, while others complaining that they still could not guarantee the movie they wanted. Top Ticket was launched as a dedicated section on the Blockbuster UK website in the same month.[86]

In May 2011, Blockbuster UK announced a lower new release rental price of 2.99 for new release movies along with an expansion of its store games rentals, allowing new games to be rented for 5 for five nights.[87] Blockbuster announced the end of late fees and the return of the Blockbuster Promise in a Blockbuster TV Commercial.[88]

In July 2011, Blockbuster UK announced the launch of a new website, Blockbuster Marketplace.[89] This site is devoted to selling second-hand DVDs, Blu-rays and games and can be found at

In August 2011, Blockbuster UK launched a new iPhone app, which allowed customers to update their online rental lists as well as Click & Collect in the store. It received app of the week in leading British tabloid The Sun. [90]

In September 2011, Blockbuster UK relaunched their website with new features including a new look and feel, dedicated blu-ray sections, better navigation and added online games rental. [91]. Seven days after launching online games rental, Blockbuster UK upgraded all Blockbuster By Post customers to have online games rental as part of their monthly rental plans [92]. The changes were also reported by industry online magazine in an interview with Blockbuster's Head of Online Malachi Simmons [93]

In October 2011, Blockbuster UK launched an upgraded TV section on their website. This broke out TV series on site into a new area for the very first time. [94]. This was followed by an announcement that Online subscribers could now get discounted rentals in-store [95].

Late in October 2011, Blockbuster UK reduced the price of renting movies in-store down to 99p. This led to a radical overhaul of both the stores and the stores section of the Blockbuster UK website [96]. This was widely reported in the media and featured in an interview with Blockbuster UK's Commercial Director Gerry Butler on BBC Radio 4 [97].

In November 2011, Blockbuster UK launched its second TV campaign of the year, promoting in-store game rental for 5 for 5 Nights [98]. This was run on high profile slots such as ITV's X-Factor. To support its games offering, Blockbuster UK's Click & Collect service was updated to allow consumers to reserve games to rent in-store [99].

In January 2012, Blockbuster UK announced that Top Ticket would now be included free for all Blockbuster By Post customers. Previously, this was only avaialble to Blockbuster Unlimited members. This opened the guarantee service up to customers paying less than 7.99 for the first time. [100]. This was followed up in February 2012 with an announcement that Blockbuster UK would support 3D Blu-rays for rental both online and instore going forwards [101].

In March 2012, Blockbuster UK passed 100,000 followers on Facebook. [102]. In April, Blockbuster UK upgraded to Facebook Timeline and integrated this with the Blockbuster UK website. This allowed customers on Facebook to browse through over 100 years of movies and games events on Facebook, while linking to

In May 2012, Blockbuster UK launched a new rewards programme called Blockbuster VIP GAMER, awarding points based on not only purchases but also watching trailers, entering competitions and more [103]. This was widely reported online to be endorsed by leading Games website IGN [104].

In late May 2012, Blockbuster UK announced the launch of Blockbuster Total Access in the UK for the first time. Allowing online customers to swap their online rental discs in Blockbuster stores for movies from the store [105].


Blockbuster came to Denmark in 1996 with the acquisition of the 29 Christianshavn Video stores. Since they have opened many stores across the country and is now at 70 stores in total. Their stores are open 365 days a year with hours usually from 10 a.m. to 10 p.m.


Blockbuster was the largest rental store in the entire country. But finances were not good enough due to the high rental prices. Lojas Americanas the largest Brazilian department store acquired half of the shares and now it is named under Americanas Express Blockbuster. The store layout is now similar to a regular American store with a Game Rush, but instead of games it offers electronics goods like computers and DVD Players, groceries like candies and microwave popcorn, and even toys from Mattel and Hasbro's board games. Blockbuster sold its Brazilian stake in 2007 for a steep loss.

In January 2006, Blockbuster Brazil also introduced an online rental service now featuring both DVD and Blu-ray plans. There were currently four Block plans available with prices ranging from R$34.90 to R$79.90. The 3-disc plan with unlimited exchanges was R$49.90/month. Unlike the US service, there was no in-store disk exchange.

Movielink acquisition

On August 8, 2007, Blockbuster announced that they have reached an agreement to purchase Movielink. According to the 8-K filing by Blockbuster, the total purchase price was $6.6 million. The exact terms of the agreement have yet to be disclosed, but it can be assumed that the deal was to include content agreements with the major studios, thus giving Blockbuster access to one of the largest libraries of downloadable movies.


Misleading advertising

In 2005, Blockbuster launched a marketing campaign describing changes in its late fees policy and offering "No Late Fees" on rentals. The program sparked investigations and charges of misrepresentation in 48 states and the District of Columbia, as state attorneys general including Bill Lockyer of California, Greg Abbott of Texas, and Eliot Spitzer of New York argued that customers were being automatically charged the full purchase price of late rentals and a restocking fee for rentals returned after 30 days. In a settlement, Blockbuster agreed to reimburse the states the cost of their investigation, clarify communication to customers on the terms of the program and offer reimbursement to customers charged fees prior to the clarification. New Jersey filed a separate lawsuit and was not a party to the settlement.[106][107][108][109][110]

The 2005 controversy came after a related lawsuit settled in 2002 in Texas. That lawsuit, alleging exorbitant late fees, led the company to pay $9.25 million in attorney fees and offer $450 million in late fee refund coupons (which were rent-one get-one-free coupons, and thus required the customer to make an initial expenditure). The company estimated that the coupons would ultimately cost about $45 million depending on the redemption rate; an attorney for the plaintiffs estimated the final cost at closer to $100 million at a redemption rate of about 20% (calculated based on a similar case in Michigan).[111][112]

Such corrections were also sent to international stores such as those in Canada to prevent further lawsuits.

Blockbuster reintroduced late fees in its United States during the year 2010 under the name of "Additional Daily Rates". With this pricing scheme, rentals were once again limited to a certain amount of days and occurred pay-per-day rates after the days allocated are exceeded.



  • "Wow! What a Difference!" (1990s)
  • "Make It a Blockbuster Night" (1990s)
  • "Bringing Entertainment Home" (?)
  • "Go Home Happy" (1990s)
  • "Let The Good Times Roll" (?)
  • "The New Blockbuster" (2005)
  • "America's #1 Home Entertainment store" (current)
  • "There's more inside" (current)
  • "The Movie Store at Your Door" (current, Blockbuster Online) [113]

Super Bowl

One of Blockbuster's most well known advertising campaigns was launched during the 2002 Super Bowl. It starred the voices of James Belushi and James Woods, as a rabbit and a guinea pig in a pet shop, located across the road from a Blockbuster store. The first campaign ended in 2003. The Carl and Ray campaign started again in 2007 starting with a commercial in the first quarter of Super Bowl XLI.


Other sources

External links

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