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Blockbuster Inc. is an American-based chain of VHS, DVD, Blu-ray, and video game rental stores currently under Chapter 11 bankruptcy. At its peak in 2009, Blockbuster had up to 60,000 employees. 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. Because of competition from other video rental companies like Netflix, Blockbuster has seen significant revenue losses. The company filed for bankruptcy on September 23, 2010. Some Blockbuster Video stores in the nation have been taken over by Houston, TX based mattress firm, Grapevine, also Texas based GameStop, and others.
The first Blockbuster store opened October 1985 in Dallas, Texas at the corner of Skillman and Northwest Highway. 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 sizeable collection of catalog titles. The logo was created by Lee Dean, working for the now defunct Rominger Advertising agency.
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.
Huizenga and Melk used similar techniques in growing Waste Management, and soon, they were opening one store every seventeen hours. They also bought every Blockbuster franchise they could get their hands on (removing pornographic movies). The company became a multi-billion dollar company and was sold to Viacom for a price of $8.4 billion.
The Blockbuster Block Party concept was test-marketed in Albuquerque, New Mexico and Indianapolis, Indiana; Block Party 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. During the 1990s Blockbuster bought out their major UK rival Ritz Video and changed the name of all the stores to their own, which made them the number one video rental store in the country by a wide margin.
In 1992, Blockbuster acquired the Sound Warehouse and Music Plus music retail chains and created Blockbuster Music. In August 1998, Viacom sold the Blockbuster Music chain to Wherehouse Entertainment, who was subsequently purchased by Trans World Entertainment in 2003.
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, 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.