Blockbuster goes public. [215], In May 2004, Blockbuster also introduced an online subscription service. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. At its peak in 2004, Blockbuster had more than 9,000 stores worldwide. Thirty-one years ago this week, 29-year-old entrepreneur David Cook opened the first Blockbuster video store in Dallas, Texas. The first store was a success and Blockbuster expanded rapidly, eventually becoming one of the worlds largest providers of in-home movies and game entertainment, before eventually filing for bankruptcy in 2010. [107][108] In May 2015, Michael Kelly retired from Dish. David Cook created a household name, but he refuses to become one. In 1989, the company entered the United Kingdom via its purchase of the 875-store Ritz Video chain for $135 million, from parent company Citivision. [192][193] In December 2011, Blockbuster closed off its last branch store, and had only 80 automated video rentals left. Blockbuster obtained videos for little cost and kept 60% of the rental fee, paying the other 40% to the studio, and reporting rental information through the global media measurement and research company Rentrak. Such corrections were also sent to international stores such as those in Canada to prevent further lawsuits. He also probably won't be missing from the business world for long. [24][25][26] The chain's name is derived from the term blockbuster, a Hollywood term for a successful film. Partial support for in-store exchange was added in April 2005 with the launch of an "OnlineXtra" service. [194][195] By June 1996, 32 stores were in operation with a public aim for 150 by 1998. [225], These price drops were followed by a price drop of the Blockbuster UK online pay per rent service. [131] In activity related to the GameStop short squeeze of January 2021, the BB Liquidating stock surged, despite there being "no value for the common shareholders in the bankruptcy liquidation process, even under the most optimistic of scenarios. "But you learn your limitations." Local franchisee sues Blockbuster Inc., alleges Dallas company 'undercut' its business 1/5/2007", "Accessing the Blockbuster On Demand service on a WD TV Live Product", "Blockbuster On Demand launches on Roku | The Official Roku Blog", "Blockbuster to close U.S. retail stores, mail DVD operation", "Best Super Bowl ad? This service cost 2 per month, required an online subscription to a disc plan, and added two extra discs sent by mail. [245], 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.[246]. [213], In January 2006, Blockbuster Brazil also introduced an online rental service now featuring both DVD and Blu-ray plans. Just seven years later, he sold the company to Viacom for . Cook Data Services, Inc., was founded in 1982 by David Cook to supply computer software services to Texas ' s oil and gas industry. At its peak, in 2004, Blockbuster had more than 9,000 stores and some 60,000 employees. Recent website changes have some speculating about a possible comeback. The company had acted as a guarantor towards Blockbuster's remaining debt. However, that decision adversely affected the profitability of the stores. Variety. Harding says superfans send her vintage memorabilia to decorate her store and they can even stay there, after the store partnered with Airbnb to offer sleepovers. At this time, there were 2,800 Blockbuster stores. On January 16, 2013, Blockbuster UK entered administration, appointing Deloitte as company administrators, casting doubt over the future of their 528 stores in the country. [98], On October 4, 2012, Dish Network announced that it was scrapping plans to make Blockbuster into a Netflix competitor. Nobody wants you shrieking and pointing every time the car passes one of those torn-ticket logos. Blockbuster handed its remaining shares over to Fujita Den Trading in 1999, and exited the Japanese market. Never heard of him? But its demise was as dramatic as any, ahem, blockbuster. Clayton did not say when these additional closings would happen and only remarked that some stores were unprofitable. [36] It also owned 35% of Republic Pictures; that company merged with Spelling in April 1994. Supported devices now only included computers, Blu-ray players, select television sets, and cellular phones. It was the brainchild of David Cook, a former computer software developer who decided to open his own video rental store utilizing a computerized check-out process to manage a library of a whopping 8,000 titles. Sumner Redstone, whose Viacom conglomerate then owned Blockbuster, personally pioneered a new revenue-sharing arrangement for video in the mid-1980s. Following a series of further closures in 2019, only one franchised store remains open, located in Bend, Oregon, United States. The store layout was 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. Founded in 1985 by David Cook, Blockbuster debuted in Dallas, Tx. [109], Blockbuster's decline was attributed to poor leadership according to others in the industry. A Brief History of Blockbuster 1985: Founder David Cook had fallen on hard times when his software business suffered with a downturn in the oil and gas industry, where his main buyers were.. Here's a brief history. He also refers to having blabbed to a Huizenga biographer. [122][123] The Bend, Oregon location became the last remaining Blockbuster in the world following the closure of the remaining Australian franchise-owned locations;[124][18][125][126][17] it serves as a tourist destination, housing Blockbuster memorabilia and Russell Crowe film props which John Oliver donated. [68], A billion-dollar campaign called "Total Access" was introduced in 2007 as a strategy against Netflix. [240] 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. Later that year, Cook left the company, as the headquarters moved to Fort Lauderdale, Florida. [56], In mid-2000, the company partnered with Enron in an attempt to create a video-on-demand service. The company had already closed down its stores in Ecuador, Portugal and Costa Rica. Cook does turn chatty--or multisyllabic anyway--in listing his reasons for not talking himself up. Privacy Policy. [113][114][115], Although Blockbuster stores could remain open by paying a licensing fee to Dish,[116] there was no longer a corporate entity to provide supplies of branded products, forcing franchisees to design and produce their own. Articles with the HISTORY.com Editors byline have been written or edited by the HISTORY.com editors, including Amanda Onion, Missy Sullivan and Matt Mullen. It boasted 9,000 locations around the world and had caught the attention of Carl Icahn, one of Wall Street's most successful investors. Changing the day will navigate the page to that given day in history. In October 2010, FEG transferred control of the Video Ezy Australia and Blockbuster Australia online businesses to its newly acquired and reorganized company, Elan Media Partners, leaving FEG to manage the franchise relationships with individual Video Ezy and Blockbuster outlets. [153], In Australia, the first Blockbuster store was opened in 1991 in Melbourne. In 1995, the growth continued with the opening of the 100th video store in the country. [105] Dish maintained its video streaming services, Blockbuster on Demand and Blockbuster@Home,[106] until they were replaced by a new subscription service in April 2015 called "DISH Movie Pack". Do Not Sell. They put focus entirely on what was new rather than on discovering film history "[135], When a title was no longer a new release, each store would retain a few copies of it and typically sell off the rest as "previously viewed" for discounted prices. Per the Associated Press, Blockbuster's "No Late Fees" campaign wasn't exactly what it seemed to be. During its heyday, Blockbuster offered primarily at video rental shops, but later alternatives included DVD-by-mail, streaming, video on demand, and cinema theater. Morningstar: 2018 Anderson was president and chief financial officer of Cook Data. This brought approximately 270 Record Bar, Tracks, Turtles and Rhythm and Views music stores and approximately 160 video retail superstores into the corporation. Just seven years later, he sold the company to Viacom for an eye-watering $8.4 billion and the corporation took it public in 1999. Blockbuster had a chance to buy Netflix for $50 million in 2000 but decided against it. [75] Subsequently, Circuit City filed for bankruptcy on November 10, 2008, and, after liquidating all of its stores, ceased operations on March 8, 2009. Lest we forget, Blockbuster once operated over 9,000 stores, had 60,000 employees and generated more than $5.9 billion in annual revenue, with a presence in more than a dozen countries around the world, all of which operated as different business holdings. 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). David Cook opened the first Blockbuster in 1985. Enron also filed for bankruptcy that year, List of retailers affected by the retail apocalypse, "He Began Blockbuster. Insider's review of past versions of the website using the Wayback Machine internet archive suggests that the change was made sometime last summer. Netflix is also getting out of the DVD-rental business. After working in computer software, founder David Cook decided to open his own video-rental store in Dallas, Texas. The ad worked, according to the Times: Sales both online and in-store were up sharply in the days after it was posted, store employees said. A small chain called Megahit Video began in Canada in 1986. Friday, May 23, 2008 Interview with David Cook, CinemaNow There's been a lot of changes in the online video market lately -- with everything from studio-backed streaming efforts like Hulu, Apple moving into video with iTunes, to user-generated video sites. A Blockbuster Video store on Houston Street in New York's East Village. An independently owned Blockbuster in Bend, Oregon, is the only store still open. Looking at a rough timeline of the company's history, it becomes clear how early Blockbuster's competitive and financial problems started. Icahn accused Blockbuster of overpaying chairman and CEO John F. Antioco, who had served in that capacity since 1997, receiving $51.6 million in compensation for 2004. Unlike Blockbuster's U.S. stores, each Japanese outlet only occupied about half the floor space at 5,000 square feet due to the country's more limited available real estate. Blockbuster signed a deal with ITV Studios Global Entertainment to launch ITV Programmes released on DVDs, Blu-rays, etc. . While it was a major success every free movie cost the company two dollars, but the hope was that it would attract enough new subscribers to cover the loss. [251][252][253][254][255], The 2005 controversy came after a related lawsuit settled in 2002 in Texas. [139] Most Blockbuster locations also accepted trade-ins of used movies, TV shows, and games.[140]. [238] However, the "heavily promoted" deal fell through, with Enron's shares dropping following the announcement. On September 23, 2010, the company filed for Chapter 11 bankruptcy protection. Rather than allowing customers to return rentals whenever they wanted, the company instead converted the rental to a sale on its eighth day overdue meaning customers were charged the full price of the film or game they'd rented. [211] A week later, with no success in finding a buyer, it was announced by Moorfields Corporate Recovery that all remaining stores in the country would cease operation on December 16, 2013, with stock to be cleared the day before this. [176] A small chain called Megahit Video began in Canada in 1986. Yes, he'd be richer if he'd been more patient. [87] Blockbuster admitted that it might 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). The store also said a large number of tourists visit the store to reminisce about the former rental company. By the end of 1998, Blockbuster Australia opened over 125 stores. His most recent startup, a provider of e-mail security services called ZixCorp, has attracted such brand-name investors as Huizenga, Bill Gates, and some retired rich guy named Jack Welch. The people featured . [249], One of Blockbuster's most well-known advertising campaigns was launched in 2002 during Super Bowl XXXVI. Blockbuster launched its 1,000th store in the early '90s and acquired several other large retailers along the way, including the U.S. chains Major Video and Erol's Video and the British store Ritz. Phone sales began in Toronto and Calgary, later expanding to other cities with Wind coverage. That same year, Blockbuster launched an online DVD rental service to compete with Netflix. Wayne Huizenga is a former Waste Management executive who took over the company and built it again before [136][137] As one commentator complained, "Blockbuster was once an unstoppable giant whose franchises swept across the country putting mom and pop video stores out of business left and right by offering a larger selection of new releases, pricing them at a lower point due to the volume they worked in Gone were the fragmented, independently owned shops that were often unorganized treasure troves of VHS discoveries.