The transformation
Blockbuster actually started off as an oil company called Cooks Data Services. This oil company supplied tools and computer software services to the Texas oil and gas industry. The founder of Cooks Data Services, David Cook, decided to move into the movie business after his wife convinced him to do so when Cooks Data Services began to struggle. Thus, Blockbuster Entertainment was born. On October 26, 1985 the first Blockbuster store opens in Dallas, Texas with more than 8,000 tapes in 6,500 titles. Cook goes on to sell one of the franchises to a group of 3 investors, Scott Beck, a young businessman, John Melk, former executive with Waste Management, and Wayne Huizenga, the co-founder of Waste Management and then proceeds to leave the company 2 months after the investment group bought into Blockbuster.
Wayne Huizenga
History
Blockbuster started out with the pay-per-rental business model and this model continued to be their main business model for Blockbuster's lifetime. After the 3 investors took over Blockbuster, they continued to grow the company and within 5 years, Blockbuster was the undisputed video rental leader, with 2,800 stores worldwide. Blockbuster was growing in part due to advertisement and word of mouth but also because Blockbuster was eliminating their competition. Blockbuster acquired retailers such as Britain's Ritz, Major Video and Erol Video. Both Major Video and Erol Video were major chains in the United States and so when Blockbuster bought those 2 chains, a serious amount of their competition vanished in the U.S. In 1994, Viacom bought Blockbuster for 8.4 billion dollars. While all this growth and buyout was occurring, Blockbuster seemed to be constantly changing their CEO. During 1994 to 1997, Blockbuster had 3 CEOs and this made the public a little nervous. From 1997 to early 2000, Blockbuster seemed stable and did quite well. When late 2000 rolled around though, Blockbuster customers were not happy. Blockbuster had take in over $800 million dollars in late fees alone, accounting for 16% of their profit. While Blockbuster enjoyed this money, their customers did not and Blockbuster ultimately removed the late fee in order to retain customers. Due to the popularity of Netflix, in 2004 Blockbuster launched its own online DVD rental service to try to compete with Netflix. Blockbuster couldn't handle Netflix and slowly but surely lost customers and money. Come 2010, Blockbuster filed for Bankruptcy protections to try to remove a billion dollars worth of debt. Blockbuster started shutting down stores by the hundreds to cut cost and is forced to shut down some of their international operations. Even with their lower costs and less operations, Blockbuster couldn't handle the debt and files for bankruptcy. Dish Network bought Blockbuster for $320 million and begins to close down stores and sell off some properties.