Movie Rental Business: Blockbuster, Netflix, Red box. Case Solution


i. Block Buster

Blockbuster Inc. is an American-based company of DVD, Blue-ray, and video game rental stores. The company is currently under Chapter 11 bankruptcy. In January 3rd 2010, there were over 5000 Blockbuster stores in the U.S. and working in 17 countries worldwide. The head quarter is situated in the Renaissance Tower in Downtown Dallas, Texas. Due to competition from other video rental companies such as Netflix, Blockbuster has seen momentous revenue losses. The company filed for economic failure on September 2010.

ii. Netflix

The founder and CEO of Netflix, Inc. Reed Hastings has integrated in 1997 and starting movie rental services in 1999. Netflix continues to employ a subscription based business model. The company has been initially providing only a DVD-by-mail service in which the customer pays for assured level of membership, which resolute how many DVDs could be rented at one point of time. The DVDs were mailed to the customer and after that they were returned by the customer.

movie rental business blockbuster netflix red box case solution

movie rental business blockbuster netflix red box case solution

iii. Red Box

Red box is a wholly-owned subsidiary by Constar, Inc. They offer movie rental for only $1 per night. The first kiosks are situated at McDonald’s. In the year 2010, the overall number of installed Red box and DVDC press Kiosks was almost 25000. Red box’s key strategy is to have kiosks that hold mostly fresh releases of movies on DVD prints in shopping and high rush areas that are visited a lot. The rental fee is contemptible, as it is only $1 per night and the whole order and return process is fast, simple and easy for the customer. With its many kiosks, Red box has built a strong brand status.


i. Gather the audience at one platform

The overall market share of blockbuster decreased due to the decline of share prices and the technology has changed its diversity and decreased the revenue that is generated by the company. It should find a way to make a website where everyone can rent movies online or even from television without having to get out from the bed. Even though it would be analogous to Netflix, however it would bring them more service. Sometimes Netflix does not have a lot of new movies when Blockbuster releases the movie on the same day as it comes out and that is an-enormous benefit that Blockbuster has over Netflix and needs to take advantage. They would change the prices, basically lowering them and changing rental times to make them more expedient for people to want to still go to Blockbuster and want to spend the money to rent the movies and games. They have to bring more things into Blockbuster such as CDs and creating more choices for people to make them want to purchase when coming to Blockbuster.Moreover,this will create and decrease the digital disruption in movie rental business.

ii. Give Training to the Staff

The differences between Blockbuster from Netflix, Red Box, and video on demand are not the opportunity to sell movie junk. Basically it’s just that you have people in stores who can recommend what movies they would like. Every other business out there has qualified its staff on up selling customers. If the staff actually makes good recommendations and is available to help then it would encourage them to reduce the digital disruption…………………..

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