Recently, Blockbuster's share of the video rental market had been sharply decreasing in the face of opponents such as the low-cost, convenient Redbox vending machines and mail order and video-on-demand service Netflix. The only expectation for Blockbuster, as it was seen by Keyes, was to change its business model from primarily brick-and-mortar physical DVD rentals to increased digital and mail-order video delivery.
Movie Rental Business Blockbuster, Netflix, and Redbox Case Solution
In the support of Keyes, the studios were willing to supply him with that assistance. Hollywood desired to see Blockbuster win the video-rental wars. Consumers still made regular purchases of DVDs at its shops-purchases which were considerably more profitable than the rentals that stayed Blockbuster's principal company for studios. Blockbuster had made attempts at making its business model more nimble, but the results were disappointing, and its debt continued to skyrocket. By the end of 2009, the business's debt had climbed to $856 million, its share of the $6.5 billion video rental business had dropped to 27 percent, and its sales had tumbled 23 percent to $4.1 billion.
PUBLICATION DATE: October 12, 2010 PRODUCT #: KEL616-HCB-ENG
This is just an excerpt. This case is about STRATEGY & EXECUTION
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