AUDIO ABSTRACT ABOUT THE BLOCKBUSTER COMPANY

1. Most important facts of the Blockbuster Company:

 Blockbuster was founded in 1985, its founder designed a movie tape rental
system that allowed him to determine the preferences and tastes of people,
the rental of film tapes was profitable and in a short time they were offering
franchises in the market.
 Two years later, a guy named Wayne Huizenga. Wayne buys Blockbuster
for $ 18.5 million and after 5 years Blockbuster had 2,800 stores.
 In 1994 Wayne Huizenga sold Blockbuster to Viacom for $ 8.4 billion in a
share swap, but that money must have been used by Blockbuster to buy the
Paramount Studios.
 Three years later in Silicon Valley a guy named Reed Hastings creates
Netflix.
 In 1999, Viacom took Blockbuster out of the stock market at a value of $ 2.6
billion dollars and a few years ago it had bought it at $ 8.4 billion dollars.
 In the year 2000 Blockbuster announced that they had revenues of $ 800
million dollars in fines payments from their clients for late delivery of the
tapes.
 In 2004, Blockbuster has 9000 stores worldwide.
 Between 2004 and 2006 Blockbuster begins a commercial battle in the
rental of film tapes by mail with Netflix, but Blockbuster lost.
 In the following years, Blockbuster contracted several CEOs from
companies such as Wal-Mart and 7-eleven11.
 Finally, Blockbuster filed for bankruptcy in 2010.

2. Negative facts in the history of Blockbuster:

 Viacom should not have finance staff buying companies. This should be
strategic planning on the part of management under a more detailed
analysis that determines how long a company will last over time.
 When Blockbuster announced that they had revenues of $ 800 million
dollars in fines payments from their clients for late delivery of the tapes. This
could represent $ 800 million dollars of annoying consumers.
 Blockbuster with a competitor like Netflix (which started using the internet
and the physical mail system to reach more customers much easier and
much less expensive), was still buying new stores and had 9000 stores
worldwide, which It means they had 9,000 payments in real estate. 9,000
leases and 9,000 locations that needed employees. It was simply expensive
for Blockbuster to maintain this distribution system.
 Blockbuster was slow trying to do a mail service. And they soon discovered
that the financial results were not good.
  Blockbuster lacked vision because all the CEOs they hired came from chain
stores like Wal-Mart and 7-eleven11, they continued to be deeply rooted in
their business style they did not want to change, it can be said that
Blockbuster happened to have convenience stores because to offer movie
rental services there were also video games and sales of all kinds of
snacks, and other things.
 The CEOs of Blockbuster did not think about the future, there were two
particular situations:

 They presented the project to play movies on cell phones but the CEO
simply did not accept the proposal did not understand that the business
of the films needed to evolve and move to other means of distribution.
 In the year 2000 Netflix presented a project trying to create alliances with
Blockbuster, the project was to create together a system of distribution of
films by mail; but Blockbuster called that idea absurd.

 Blockbuster had many resources and I do not use them properly because:

 They were owned and were connected to a media company.

 They had capital, they were publicly traded and they were doing things
well they could foresee the future by better planning their strategies, but
they saw a competitor emerge and they simply did not react fast enough.
They were too loyal to their physical store business model; when they
decided they were going out to compete with Netflix it was too late they
had given him a seven year advantage in developing a mail-in system
and simply Blockbuster was not able to compete face to face with Netflix.
Blockbuster is an example to learn to be flexible and not stay in the past, because
they always believed that they were a physical store where people were renting
movies and that the market would work, they never saw themselves as a company
that provided a service of entertainment to people who love watching movies and
that the service needed to be every day more innovative as the market and
technology advanced.