1. Blockbuster's business model is the rental and sale of movies primarily at retail locations. Its main source of distributing its service and products is through its many bricks-and-mortar locations throughout 25 countries. However, since the emergence of Netflix, it also began an online subscription service in attempt to keep its large share in the movie rental market. The new business model has had mixed reviews. Netflix has more subscribers than Blockbuster's Movie Pass subscribers and is more user friendly. Blockbuster has also lost revenue from implementing its "No More Late Fees" campaign.
4. Netflix has become quite successful over the past 10 years. It has become the number one online movie rental service. It's online ordering and delivery through the mail has drastically changed the movie rental industry. Its business model eliminated the need for physical locations, which eliminates a large fixed cost. Currently, Netflix has over six million subscribers and continues to grow.
5. I think that both businesses will lose revenue from the new movie distributors emerging; VOD technology, Movielink, Apple and Amazon. Blockbuster will suffer the most because it has a large fixed cost from its thousands of physical locations around the world. Blockbuster has already closed several locations and continues to see increased losses. The entrance of these new competitors might be the end to Blockbuster. Its subscription service is inferior to Netflix and there is little growth potential for this bricks-and-mortar business today.
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