Blockbuster Bankruptcy

Blockbuster was a company that deals with the distribution of movie rentals where it had made a name for itself by offering a large variety of videos to choose. However, over the years, there has been a change in consumer tastes and preferences. A change in tastes and preferences of consumers is, however, not solely to blame for bankruptcy.  Blockbuster Inc is also in debt up to 900 million dollars.

The company faced more trouble due to a technological shift in consumer demand and the increase of on- line entertainment. The cracks in the management were evident from the cash flow problems and the distribution problems that the company faced soon afterwards. The problem that Blockbuster faces now are all somehow related to the problems it faced after the Viacom merger although it separated from Viacom in 2004.  However, with Netflix, a leading industry giant, coming up with new ways to deliver DVDs on time as well as Red box’s one-dollar vending machines it went to stiffen competition against Blockbuster Inc. Besides the increased competition, its European operations were also struggling forcing the company to shut them down altogether.

The company aims at making a great shift from its physical shops to mailing and online sales.  The company is also closing many of its physical outlets to cut on costs.

It developed a marketing strategy where its customers will access on-line movies if they have internet TV’s. The company intends to tap on to the “get it when you want it” services where its contents are available on demand of the consumer through set up boxes. It is also working on applications where Apple products user can access its services.

Annotated Bibliography

Feare, Tom. (1998). 'High-TechDC; Just the Right Ticket for Blockbuster Video,' Modern Materials Handling. New York; Random House.

The author asserts that trouble with blockbuster started in 1994 with the Viacom merger.  The move to purchase Viacom was an attempt to increase its holdings as compared to that of its rival QVC Network.  The merger was not as efficient as it was expected, and the co pants stock began to tumble, and investors lost confidence in the company.  At the time, Viacom faced financial difficulties and was heavily dependent on Blockbuster Inc.  In addition the company experienced a shakeup in its management with its long time CEO resigning; a host of other CEO’s who did a lot to try to return the image of Blockbuster Inc.  

The author provides facts that show that the financial crisis of the United States had a great impact on other huge corporations, for example, the Lehman brothers. It is, however, unclear whether filing for bankruptcy will save the corporations from their financial woes. Blockbuster filed for bankruptcy after it came up with a plan of restructure to raise money to cover its 900 million dollar debt.  Blockbuster turned to its creditors to raise more money to enable it to settle its debts.