Blockbuster - Economic, Social, and Political Trends

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Blockbuster is the entertainment leader of complete in-home entertainment. Based out of Dallas TX, the company was founded in 1985 and currently has approximately 8000 stores throughout Americas, Europe, Australia, and Asia. “As the home entertainment industry has evolved, so too has Blockbuster. While growing its share of the store-based rental business continues as a company focus, Blockbuster is no longer just a chain of video stores. It is an online as well as in-store retailer, and becoming more integrated every day” (Blockbuster Corporate, 2008). The economic, social, and political trends of business keep changing. ECONOMIC TRENDS

Until 2007, Blockbuster had posted losses for nine of the previous 10 years and had closed numerous stores. Then James Keyes took over the responsibility of the company as the chief executive officer (CEO) in July 2007. He brought along his experience and success as former CEO of 7-Eleven, which was in bankruptcy in 1990. His initial strategies including tailoring the rental and game products line to each store based on the business volume and community, reducing the amount of retail products, and using automated systems throughout the company (Newman). These economic strategies paid off, Blockbuster reported an increase in the total revenues for the second quarter of 2008 by 3.3%, which translated into $1.30 billion. Mr. Keyes was pleased with the improved same-store sales for the fourth consecutive quarter (iStockAnalyst). The trends in the movie rental industry are changing due to advancements in technological field. VHS tapes had replaced the giant discs years ago, which were in turn replaced by DVDs almost a decade ago. The new media, BluRay, seems to be the future of the movies, at least for the next few years. Besides walking into a brick-and-mortar building, consumers have many other choices, including pay-per-view, ordering movies online, or downloading through internet (with or without ownership rights). The company...
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