Blockbuster was once one of the largest retailers in the world. It helped move the consumers’ ability to watch movies from the theater to the home, via stores that offered videotapes of mainline films for rent. Eventually, it was buried by Netflix and other companies that offered DVDs via mail, and then the emergence of streaming. Two blockbuster stores survived as of this week. One will close later this month, and that leaves only one left in the world.
Blockbuster was founded in 1985. At its peak, in 2004, it had over 9,000 stores. About half of those were in the United States. Blockbuster’s employee count in the same year was 84,000, which is nearly triple what Google parent Alphabet has today. Blockbuster’s primary products were VHS and Betamax tapes rented to customers who did not want to invest in large, expensive video libraries of the clunky videotape boxes.
Like McDonald’s, Blockbuster owned some of its own locations and others were owned by franchisees. At the start of March, there were two franchises left. All the company-owned stores had been gone for years. One is in Perth, Australia. The second is in Bend, Oregon. The management of the Bend store found out the Perth store would close when it received a call from an Australian radio station, which broke the news. According to the Bend Bulletin, Sandi Harding, the store’s general manager said, “I had no idea. I wondered which one of us was going to hold out the longest.”
As the videotape rental business was eroding, Blockbuster was thrown several financial lifelines. The final was from satellite TV company Dish Network. Dish bought the company in 2011 after it declared bankruptcy in 2010. But most of the damage done by Netflix and smaller kiosk movie rental based Redbox was too severe. Blockbuster had entered the DVD via mail business, and eventually made a desperate move into streaming media. It was years too late when it began each of these initiatives. Dish planned to keep most of the 1,700 remaining stores it bought open. Financial losses were too massive for the plan to work. By the end of 2014, there were only a few hundred locations left.
The Bend store has two unique features that are the reason it has survived. The Bulletin reports that owners Ken and Debbie Tisher have owned the franchise since 2000 and have no intention to close it. The store also has a large collection of Russell Crowe memorabilia, which draws customers. These include costumes of some of the Australian actor’s most well-known films, such as “Robin Hood,” “Cinderella Man,” “Les Misérables” and “American Gangster.”
Blockbuster’s collapse was one of the biggest among all American retailers. Its troubles foreshadowed those of companies like Sears, Barnes & Noble and Toys “R” Us — the retail apocalypse as it is known. Overtaken by e-commerce, they had no way to survive as anything close to what they were during their best years. Or, in some cases, to survive at all.
For more, see retailers closing the most stores.
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