David Cook founded Blockbuster video in 1985, opening the first store in Dallas Texas and has grown to become the world’s number one video chain. In 1987 cook sold a one-third stake in the company to a group of investors. Cook was forced to turn over future control of the company, and eventually left the company. By 1992, Blockbuster had over 3,000 stores (1,000 franchise and 2,000 company owned). 2003 was the most interesting year for Blockbuster. The company placed a net loss of $845.
2 million, which shifted Blockbuster to make some important decision for the company’s future.In 2006 it launched a new way to rent movies by introducing a program that gives customers the option to exchange the movies through the mail or return them to the store and exchange them for another movie. By doing this they are the only company to offer the option of a store rental or on-line/mail rental. According to Blockbuster web site, “Blockbuster has been the preferred source for media entertainment for the last 25 years, and we fully intend to keep it that way” (Blockbuster).
Many people grew accustomed to a Blockbuster Video in every town. Ever since the rise of the internet and Netflix, the movie giant has dwindled.The struggling company filed for Chapter 11 bankruptcy protection in September 2010. In April 2011, billionaire founder of Dish Network Corp, Charlie Ergen, purchased the company. With Blockbuster out of bankruptcy, many thought that the company would have a clear path.
Ergen planned to use the company to work with Dish Network to challenge Netflix Inc. At the time Dish acquired Blockbuster, simply closing down all the stores and selling the assets would have earned Dish a $300 million profit and that was without using the well known “Blockbuster” brand name for anything.