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.............................. Blockbuster Videos Logo and Trademark..............................

Blockbuster (NYSE: BBI) is one of the largest chains of DVD and video game rental stores in the world It is headquartered at Renaissance Tower in downtown Dallas, Texas. Blockbuster has many locations in over thirty countries, including the United States, Canada, Mexico, Argentina, Uruguay, Ireland, Puerto Rico, UK, Australia, New Zealand, Israel, Peru, Brazil, Chile, Taiwan, Italy, Denmark, Venezuela, and Colombia. They currently have 5192 stores across the U.S. International stores (operating under Blockbuster and other brands) totaled 3,291, in 2004 including 426 in Canada, 897 in Britain, and 408 in Australia. It has been claimed that there are more than 43 million U.S. households with Blockbuster memberships. The company has an Irish subsidiary, Xtravision, which does not operate under the Blockbuster brand name.

   

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A Blockbuster store in the UKIn Australia, the company pursued a franchising model whereby its corporate stores, which peaked at 133 in 1998, were converted into franchises. The company also disbanded its chain of Game Rush video game stores, presumably as a part of the U.S. headquarters’ strategy to focus on core rental business. Metropolitan Victoria (Melbourne) was the last remaining significant concentration of corporate stores.

In December 2004, Blockbuster announced it wanted to pursue a hostile takeover of Hollywood Video, its major U.S. competitor. In response, Hollywood Video agreed to a buyout in January 2005 by a smaller competitor, the Dothan, Alabama-based Movie Gallery.

In February 2007, Blockbuster announced plans to sell its Australian subsidiary and franchising rights to Video Ezy, subject to approval from the Australian Competition and Consumer Commission. Blockbuster's Australian operations encompassed 29 company-owned stores and 341 franchises, which Video Ezy would continue to operate using the Blockbuster brand.

On June 29, 2007, The Hollywood Reporter reported that Blockbuster announced on June 28, 2007 that the company would be closing 282 stores that year. In Summer 2003, Blockbuster started converting select stores in select regions to GameRush stores. These stores sell and buy consumers DVDs, games, gaming systems, and accessories. It is offered as a direct competition to stores such as GameStop and Game Crazy. Blockbuster used their location status to get instant coverage; it also promotes these stores by hosting video game tournaments, special trade-in offers, and a more "hip" look to the selection and staff. However when Blockbuster introduced "The End of Late Fees" GameRush was put on the chopping block. As of April 2007, GameRush stores are being reduced back to just a games section.

In August 2004, Blockbuster introduced an online DVD rental service in the U.S. to compete with the established market leader, NetFlix. Blockbuster's U.S. online operation started with around 10 warehouses; further expansions every year have brought that number to 36 (5 more to open in late 2007), plus 1400+ stores in the Blockbuster Online network. Most Blockbuster independent franchises do not honor the Total Access program. The company had 1.5 million subscribers at the end of the third quarter of 2006 (as compared to 5.6 million for NetFlix). Blockbuster's move to follow the business pattern with its online rentals as was established by NetFlix prompted NetFlix to sue Blockbuster for infringement of patent. Blockbuster counter sued NetFlix with a counterclaim alleging deceptive practices with its patent which it alleges was designed to maintain an illegal monopoly.

Currently Blockbuster offers several online rental plans. Until July 26th, 2007 Blockbuster offered and advertised unlimited free in-store exchanges of online rentals with all plans, included free of charge. Blockbuster now offers the original plans for the original price with limited in-store exchanges and for a substantially higher price point, the consumer may have the original plan with unlimited in store exchanges. The change was due to what can only be perceived as a tactical maneuver to prevent the consumer from over utilizing the in-store exchange benefit, (reference Blockbuster incident #070819-005769). 

As of September 2007, the online system was changed to the new online system of a few in store exchanges instead of unlimited. Many customers saw this as a draw back to the system and threats to move to Netflix ensued. Customers must understand that even though they can no longer have unlimited exchanges, unless paid for extra. Customers still movies free, and not to mention a discounted price on exchanges past the inital 2-5, depending on how many movies you get out at a time. At the end of 2006, Blockbuster Total Access had 2.2 million customers, exceeding their original goal of 2 million, according to the official website. After an aggressive media campaign that accounted for much of Blockbuster's $46.4 million net loss in the first quarter of 2007, the Total Access subscriber base surpassed 3 million customers in total, marking the company's highest subscriber growth quarter ever.

On January 5, 2007, Southern Stores Inc, one of Blockbuster's largest franchise operators in the United States, filed a lawsuit in federal court alleging that, by introducing Blockbuster Online and Blockbuster Total Access, the rental chain has undercut the group's franchise agreement.

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