Innovation is crucial when operating a business. When a company doesn’t innovate, it falls behind its competitors and inevitably becomes obsolete. Here is a timeline of how Blockbuster failed to innovate and therefore was taken down by its competitors.
A man named David Cook is hit hard when petroleum and gas industry experiences a decline. This gives him the idea to open the first Blockbuster store in Dallas, Texas and therefore founding the company.
The company opens up a warehouse worth millions in order to grow the business.
Blockbuster is bought by the founder of Waste Management, Wayne Huizenga, for $18.5 million.
The company is allowed to rent video games through winning a court case with Nintendo.
Blockbuster is opening a new store every day to rapidly expand the company. In addition to this, they acquire video chain stores Ritz, Major Video and Erol’s. This grew the business by almost 3,000 stores.
Blockbuster is sold for $8.4 billion to American mass media company Viacom, Inc.
A customer by the name of Reed Hastings is charged a fee of $40 for returning the movie “Apollo 13” too late. This inspires him to create a rival company called Netflix.
Blockbuster goes public on the New York Stock Exchange in an initial public offering (IPO).
Blockbuster rakes in over $800 million in late fees, this ends up being 16% of their revenue for the year.
Netflix is offered to Blockbuster for $50 million, but the offer is declined.
Blockbuster acquires Gamestation.
Netflix goes public on the NASDAQ in an IPO.
Blockbuster launches an online DVD subscription service for a flat fee of 19.99/month. This offers unlimited rentals but arrives 7 years after Netflix.
Through this time, Blockbuster refuses to innovate its business and actually closes its online services to focus on its in-store operations.
Amazon launches Amazon Video.
Hulu is founded.
Blockbuster has amassed over $1 billion in debt and files for bankruptcy.
Blockbuster is delisted from the NYSE, 11 years after its IPO.
Dish Network purchases Blockbuster’s remaining assets for $320 million through an auction.
Dish announces its plans to close many of the remaining stores, although the real estate was valuable and there were rumors about using the storefronts to sell cell phones.
Dish started shutting down all remaining stores in the U.S. and discontinues the rent-by-mail service.
CBS News reports that “This Is the End,” by Seth Rogen is the last film to be rented at a Blockbuster store.
Netflix’s show “Orange is the New Black” receives a Grammy nomination.
Netflix’s show “House of Cards” is the first web-only series to be nominated for a Golden Globe and actress Robin Wright wins a Golden Globe Award.
Netflix is now worth over $65 billion, over 5 times more than Blockbuster was at its peak.