This is how he managed to turn his company into one of the largest video store chains in the world and came to have more than 9,000 branches all over the world and employ more than 80,000 people.
In 1987, Blockbuster would take the first step to become the multinational monster that it would become a few years later. cook sold for US$18.5 million the company to a trio of investors including Wayne Huizenga, founder of Management Inc.
That same year, Blockbuster won a lawsuit against Nintendo which would allow it to expand its offer and rent video games in addition to movies. This catapulted access to a generation of consumers who were not as interested in cinema as they were in new interactive forms of entertainment.
The company moved to Florida and in just one year, it was already the most important video store chain in the United States, with 800 stores all over the country.
In the early 1990s, Blockbuster began its expansion outside the United States.
In 1992, Bluckbuster already had 2,800 stores around the world. opening one every 24 hours, which attracted the attention of multinationals even more powerful than the three initial investors. In 1994, viacom bought the network for $8.4 billion, shortly after it merged with Paramount Pictures.
Disembarkation in Buenos Aires
Additionally, the company saw Latin America as a promising market for movie and video game rentals, and in 1994 opened its first store in Buenos Aires.
The arrival of Blockbuster in the country made a significant difference in the local video rental industry, which until then was dominated by small independent video stores.
Blockbuster’s entry into Argentina brought with it international standards in the presentation and organization of the branches, a wide selection of titles and a focus on the customer experience, a package to which Argentine consumers enthusiastically added. Thus the chain quickly expanded to other important cities in the country.
During the 90s, Blockbuster established itself as the main video store in Argentina. The chain offered not only a vast selection of movies and video games, but also candy, ice cream and toysamong other products linked to the pleasure experience associated with watching a movie at home.
Blockbuster’s success in Argentina was also due to its ability to adapt to local tastes. The chain included both Hollywood hits and Argentine and international films in its catalog, which made it attractive to a wide and diverse audience.
The beginning of the end
In 1997, a Blockbuster customer named Reed Hastings has an enlightenment that would end in the death of the chain: having to pay a fine for returning the movie ‘Apollo 13’ late, he becomes so angry with Blockbuster that he begins to create a new service to dethrone the chain.
The numbers at stake convinced him that there was ground to conquer: billing for fines applied by the chain for late returns. had added 800 million dollars in one yearequivalent to 16% of its profits in that period.
Hastings’ invention was renamed Netflix. And it consisted of sending the tapes to the homes of its subscribers in exchange for a subscription fee and they could have the tapes as long as they wanted, without exposing themselves to fines.
The rapid growth of Netflix did not go unnoticed by Blockbuster, which had the opportunity to buy the emerging company for $50 million in 2000, but gave up at the last minute.
Instead of investing in buying this promising startup, he preferred to finance the Blockbuster Online by-product by stealing something from his competitor’s concept.
In the late ’90s and early 2000s, the entertainment landscape began to change dramatically. The advent of DVD quickly replaced VHS, but Blockbuster initially adapted well to this change.
In 2004 the chain began trading on the New York Stock Exchange. But instead of being a magnet for investors, the experience of opening capital helped the giant Viacom sold his stakeas if he sensed that something was going to go wrong.
It was just when, in an attempt to adapt to the new context, Blockbuster launched its own online rental service. But the initiative came too late. The company was unable to compete effectively with Netflix, which had begun to establish itself as a leader in the Internet market. streaming.
The real executioner of the chain was the advent of the Internet and digital technologies. The arrival of DVD-by-mail rental services, like the prehistoric Netflix, and then streaming platforms, forever changed the way consumers accessed movies.
The convenience of being able to select and watch movies from home, without having to go to a physical location, made Blockbuster’s business model started to look obsolete.
In 2010, Blockbuster went bankrupt in the United States, and began the massive closure of its stores around the world, including Argentina. The rapid expansion that was once its strength became an unsustainable burden in a market that was increasingly moving towards digital.
Blockbuster’s decline in Argentina reflected the global transition toward digital entertainment. Today, streaming services such as Netflix, Amazon Prime Video and Disney+ dominate the market, offering a vast library of content available anytime, anywhere.
In 2018 still there were 9 stores left in the United States, which were closing until only one last branch located in the city of Bend, State of Oregon.
That store became a symbol of the last heroic days of video stores, but ended up giving up: in 2020 it appeared on Airbnb as a proposal to spend 90s themed nights, and it remained as a place of worship for nostalgic They know that it is a business that no longer has a chance of resurrecting.
