Brand Strategy Book
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BLOCKBUSTER
Blockbuster Blockbuster was an American-based provider of home entertainment rental services. It provided movie and video game rentals through shops, DVD-by-mail, online streaming, video on demand, and cinema theater. Blockbuster became internationally known throughout the 1990s. At its peak in 2004, Blockbuster employed 84,300 people worldwide and had 9,094 stores. Competition from Netflix mail-order service, Redbox automated kiosks, and video-on-demand services were the major factors in Blockbuster’s eventual demise. Blockbuster lost significant revenue during the 2000s, and filed for bankruptcy protection in 2010. The following year, its remaining 1,700 stores were bought by satellite television provider Dish Network.
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Brand History After a failed business attempt in the software industry, David Cook founded Blockbuster Video in 1985. Blockbuster thrived as a concept and innovated early, renting video games by 1987, before they were mainstream and testing new concepts like its “Blockbuster Block Party entertainment complex in 1994. Ultimately in the late 2000s, they failed to innovate into the digital space and could not keep pace with the competition, virtually disappearing overnight.
Blockbuster is the undisputed video rental leader, with over 2,800 stores worldwide. The company’s First Blockbuster Video Store opened.
growth is driven by the acquisition
Cook built a $6-million warehouse
of other retailers such as Britain’s
in Garland, Texas, to help sustain and
Ritz and US chains Major Video
support rapid future growth. Blockbuster
and Erol’s Video.
would often custom-tailor a store's
1994
inventory to its neighborhood, based on local demographics.
1985
1987
1992
1994
1987—Blockbuster started renting
1994—Blockbuster Block Party concept
video games.
was test-marketed in Albuquerque, New Mexico and Indianapolis, Indiana in 1994. It was an “entertainment complex” aimed at adults, containing eight themed areas housing a restaurant, games, laser
1987—Waste Management co-founder Wayne Huizenga took an interested in Blockbuster, using his business techniques to rapidly expand, opening a new store every 24 hours.
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tag arena, and motion simulator rides, and was housed in a windowless building the size of a city block. Viacom buys Blockbuster for $8.4 billion.
1999—Viacom takes Blockbuster public, retaining its stake in the firm in order to
2010—Blockbuster files for Bankruptcy
take advantage of its steady cash flow.
2010—Blockbuster closes over 50% of its
2000–Blockbuster takes in almost $800
stores (~3,500)
million in late fees, which accounts for
2011—Blockbuster is sold to Dish
roughly 16% of its revenue, according to
Network. Dish Network buys the assets
the Associated Press.
of Blockbuster for $234 million in cash at
2000–Blockbuster turns down a chance
auction. The deal includes more than
to purchase the still fledgling Netflix
1,700 retail locations, which it is expected
for $50 million
to close over time.
1999–2000
2004–2007
2010
2011–2013
2004—Blockbuster is at the peak of its powers, with 9,000 stores globally. 2007—Blockbuster launches Express Kiosks on grocery stores and gas stations etc after the concept was introduced by Redbox.
2012—Dish cancels plans to make blockbuster a Netflix competitor and cancels by-mail program. 2013—Blockbuster announces plans to close its remaining US stores.
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Competitive Analysis As a direct competitor, Redbox provides a similar, linear experience to Blockbuster’s former offerings; picking up a physical movie and taking it home to watch. The Ancillary competitors: Netflix, iTunes, and Hulu accomplish the same goal by eliminating the need to travel to secure a movie to watch. Taking Blockbuster into the future requires an examination of the future of entertainment. Modern consumers have endless access to devices and are looking for a break from the usual in their entertainment experience. Virtual Reality (VR) is an up-and-coming entertainment experience that could move Blockbuster into the future. Blockbuster’s VR would provide interactive group entertainment that returns to the essence of Blockbuster’s original vision: entertainment that a group can share in. The Void, Zero Latancy, wImmersis and Merge are current VR experiences. Oculus and Sony are currently making VR devices for in-home gaming or other uses, but do not yet have a group format.
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Direct Competitors:
Ancillary Competitors:
Future Competitors:
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Brand Soul Fostering connection through entertainment.
(New) Brand Mission Statement Blockbuster exists to pioneer entertainment experiences that bring people together and creating shared memories.
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Creating a new Blockbuster.
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Personas
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Dan “The Family Man” About: Dan is the “fun dad”. He likes plannig things for his family to enjoy together. He works hard but also plays hard. He has two kids, ages 11 and 14, and a wife who stays home with them. He is looking for new things to try and wants an entertainment experience that is new and unexpected for his family to enjoy. He doesn’t mind spending money on activities because he thinks memories are worth making.
Career: • Account Manager at a Tech Company. • $200K pre year salary.
Spending Preferences: Dan is extravagant in his spending when it comes to family activities. He is conservative in other areas like eating out at work or clothing.
Hobbies: Dan works hard and spends his free time with his family. He occasionally plays poker with some friends, but not often.
“ I am always looking for new experiences that I can share with my family. It is fun to surprise my kids with whatever I think up next. Let the adventure begin!”
Needs from the Brand: Dan needs a family friendly experience that will create memories his kids will talk about for years to come. He wants something unique and unexpected.
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Tim “The Teen” About: Tim is a 15-year-old boy. He loves playing video games and watching movies with his friends. He and his friends are always together: hanging at the mall, hanging in between classes at school or hanging at one of their houses and when they are not together they are likely texting. Tim loves mastering the newest tech gadgets and grew up with technology readily available.
Career: • High School Sophomore • $30 per week allowance
Spending Preferences: He is not much of a saver and has a hard time thinking to save for future experiences. He gets his allowance on Thursday and it is usually gone on Monday.
Hobbies: Playing video games, hanging out with his friends at the mall, rubix cube, learning to drive.
“ I love hanging out with my friends. We like to try new things together, especially any new technology.”
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Needs from the Brand: Tim needs a reasonably priced entertainment option that he can do with his friends on a Friday or Saturday afternoon. He wants something cool to tell others about at school.
Jen “The Youth Leader” About: Jen is a youth leader at a church where she plans the program for junior high and high school students. She is always looking for the next cool thing to put on her events calendar. She is tuned in to what teenagers like and tries to find activities that help new friendships spark and grow.
Career: • 6th—12th Grade Youth Leader at a church • $55k per year.
Spending Preferences: Jen is conservative with her personal entertainment budget, however, she gets reimbursed from the church when she does activities with students, so she is a little more indulgent there (teenagers love the next cool activity).
Hobbies: Jen loves a good road trip with his friends. She likes to go to a movie and play board games.
Needs from the Brand:
“ The trends are always changing with teenagers, but that is one of the things I like about my job, I’m never board and always doing one activity or another.”
Jen needs a seamless planning experience that she can book for a large group without spending too much time and effort on it. She wants an experience that diverse ages can enjoy.
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Brand Grids Old Blockbuster
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New Blockbuster
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Keyword: Fun
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Keyword: Contrast
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Keyword: Interactive
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Re-positioning Statement Blockbuster sought to provide customers with the most convenient access to media entertainment. We are now charting a new course to pioneer entertainment experiences that bring people together and foster connection by creating shared experiences. The new Blockbuster will take on virtual reality and explore how entertainment can embrace technology to be interactive.
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