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] As of January 3, 2010, there were over 5,000 Blockbuster stores in the U.S. and 17 countries worldwide. It is headquartered in the Renaissance Tower in Downtown Dallas, Texas.[2] Because of competition from other video rental companies such as Netflix, Blockbuster has seen 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 roughly $320 million.[4]

Blockbuster Inc., incorporated on October 16, 1989, is a global provider of rental and retail movie and game entertainment, with over 6,500 stores in the United States, its territories and 17 other countries as of January 3, 2010. The Company operates in two segments: Domestic and International. The Domestic segment consists of the United States store operations and by-mail subscription service operations, in addition to vending kiosks and the digital delivery of movies, through blockbuster.com and BLOCKBUSTER On Demand. The International segment consists of the non-United States store operations, including operations in Europe, Latin America, Australia, Canada, Mexico and Asia. On August 28, 2009, the Company completed the sale of Xtra-vision Limited, a 184 store entertainment retailer in Ireland to Birchhall Investments Limited. In September 2010, the Company filed for bankruptcy protection. The Company has filed its Chapter 11 petition with the United States bankruptcy court in Manhattan.
Domestic Operations
As of January 3, 2010, the Company had 4,018 stores operating under the BLOCKBUSTER brand in the United States and its territories. Of these stores, 493 stores were operated, through its franchisees. Its stores offer movie and game rental and new and traded movie and game product to its customers, as well as consumer electronics. In addition, 358 of these locations include a game concept stores operating under the GAME RUSH brand. During the fiscal year ended January 3, 2010 (fiscal 2010), the Company introduced Direct Access, which enables in-store customers to access the Company’s by-mail inventory and have a movie shipped directly to their homes. During fiscal 2010, the Company launched the Blockbuster app for iPhone, which enables customers to browse its catalog of movies and television shows, check real-time store inventory, locate stores and build and manage their online rental queues.
Blockbuster Inc. offers an Internet-based subscription service, through blockbuster.com that enables customers to rent digital versatile discs (DVDs) by mail and offers titles, including a range of both new release and catalog DVDs. The Company’s vending kiosk business offers DVD rentals. As of January 3, 2010, it had 2,225 kiosks, operating under the Blockbuster brand in the United States and its territories. The Company has integrated its Movielink, LLC (Movielink) offering with the blockbuster.com Website. Movielink is an online movie downloading business with libraries of digital content for both rental and sale.
International Operations
As of January 3, 2010, the Company had 2,502 stores in 17 markets outside of the United States, operating under the BLOCKBUSTER brand and other names the Company owns. Of these stores, 807 stores were operated, through its franchisees. In Canada, Italy, Mexico and Denmark, it operates store-in-store game locations in addition to freestanding game locations in Mexico and Italy, under the GAME RUSH brand.
The Company competes with Wal-Mart, Best Buy, Target, Netflix, Apple, Amazon, Gamefly, Redbox, GameStop and Movie Gallery.

By the time John Antioco took over in the summer of 1997, Blockbuster was floundering. New releases weren't making it to stores by their 'street date,' and the loss of so many key people with the company's move left it stumbling in basic store operations. Cash flow for the second quarter of 1997 at Blockbuster dropped a precipitous 70 percent. As a result, the chain scaled back on expansion and moved to refocus on its core business, video rentals. In late 1997, it exited the computer business, closing its PC Upgrades stores only months after acquiring the business.
Under Antioco, the company revived its old tag line 'Make it a Blockbuster Night,' and sought to smooth out the problems with its state-of-the-art distribution system, which allowed it to use a customer database to determine store sites and inventory based on consumer preferences. Although the company had fallen on hard times, it still controlled 25 percent of the $16 billion a year home video market. Under Antioco, the company signed 'revenue sharing' agreements with the major Hollywood studios, making them financial partners. Now instead of paying $65 for new tapes, Blockbuster paid $4 and turned over 30 to 40 percent of the rental income to the studio. In 1998, the company boasted that it had served nearly 60 million people who rented more than 970 million movies and video games. In early 1999, it continued to expand overseas, purchasing a Hong Kong video chain, and at home with the acquisition of Denver-based Video Visions and Videoland in Oregon and Washington. The chain was making money again, and its share of the home video retail market increased to 31 percent. Still the video market was shrinking, dropping 2.6 percent in 1998 and 8.4 percent in the first half of 1999. While revenues at Blockbuster were increasing, the company was still reporting losses, of $336.6 million in 1998, for example, compared with a $318.2 million loss in 1997.
Nevertheless, Blockbuster seemed to be effecting a turnaround, when in August 1999 Viacom made an initial public offering of around 18 percent of its stock in Blockbuster, with intentions of divesting it completely. The offering raised only $465 million; clearly, investors did not take the future of Blockbuster for granted and the company needed to search for a viable business model. Toward that end, management worked on increasing Blockbuster's market share in the growing VHA/DVD tape and disk rental category. Moreover, it also made a commitment to exploring new distribution channels, such as those offered by e-commerce.
Principal Competitors: Hollywood Entertainment Corporation; Movie Gallery Inc.


OVERALL
Beta: 1.69
Market Cap (Mil.): $16.75
Shares Outstanding (Mil.): 219.37
Annual Dividend: --
Yield (%): --
FINANCIALS
BLOAQ.PK Industry Sector
P/E (TTM): -- 4.98 8.93
EPS (TTM): -30.52 -- --
ROI: -70.76 5.20 0.90
ROE: -- 6.27 1.56


Statistics:
Public Company
Incorporated: 1982 as Cook Data Services
Employees: 37,000
Sales: $2.1 billion (1998)
Stock Exchanges: New York London
Ticker Symbol: BBI
NAIC: 53223 Video Tape and Disc Rental


Key Dates:

1985: The first Blockbuster video store opens in Dallas.
1986: Blockbuster goes public.
1987: Founder David Cook leaves the company; company headquarters move to Fort Lauderdale.
1989: Blockbuster opens its first stores in London and in Canada.
1992: Blockbuster acquires Sound Warehouse and Music Plus chains to create Blockbuster Music stores.
1994: Media giant Viacom Inc. acquires Blockbuster.
1996: Company headquarters move to Dallas.
1999: Viacom holds an initial public offering of Blockbuster shares on the New York stock exchange.

Name Age Since Current Position
Keyes, James 55 2007 Chairman of the Board, Chief Executive Officer
McGill, Dennis 59 2010 Chief Financial Officer, Executive Vice President
Kurrikoff, Thomas 46 Senior Vice President
Lewis, Kevin 39 2009 Senior Vice President
Dunlap, Roger 2010 Senior Vice President - North American Store Operations
McDonald, Rod 49 Vice President, General Counsel, Secretary
Fernandes, Gary 66 2004 Director
Bleier, Edward 80 2005 Director
Zelnick, Strauss 53 2005 Director
Haimovitz, Jules 59 2006 Director
Crystal, James 72 2007 Director
Meyer, Gregory 2010 Director


Address:
One Blockbuster Plaza
101 Elm Street
Dallas, Texas 75270
U.S.A.
 
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