Full Description

Blockbuster Inc. (Blockbuster) operates and franchises entertainment-related stores in the United States and a number of other countries. It offers movies and video games for in-store rental, sale and trade and sells other entertainment-related merchandise. The Company also operates an online service offering rental and sale of movies delivered by mail and digital delivery through blockbuster.com. During the fiscal year ended January 4, 2009 (fiscal 2009), Blockbuster provided in-home rental and retail movie and game entertainment, with over 7,400 stores in the United States, its territories and 20 other countries. The Company operates through two segments: Domestic and International. The domestic segment consisted of all United States store operations and by mail subscription service operations, including the digital delivery of movies through blockbuster.com. The international segment consisted of all non-United States store operations, including operations in Europe, Latin America, Australia, Canada, Mexico and Asia. In August 2009, the Company sold Xtra-vision Limited, its 186 store entertainment retailer in Ireland, to Birchhall Investments Limited.

Domestic Operations

As of January 4, 2009, the Company had 4,585 stores operating under the BLOCKBUSTER brand in the United States and its territories. Of these stores, 707 stores were operated through its franchisees. Its stores offer movie and game rental and new and traded movie and game product to its customers, including the addition of Blu-ray digital versatile disc (DVDs) to its product offerings. In addition, 404 of these locations include a game store-in-store concept operating under the GAME RUSH brand. Blockbuster offers an Internet-based subscription service through blockbuster.com that allows customers to rent DVDs by mail and offers substantially more titles than its individual stores, including an array of both new release and catalog DVDs. The vending machines are automated fixed capacity machines that enable the browsing and dispensing of a limited catalog of media entertainment.

The Company has integrated its Movielink, LLC (Movielink) offering with the blockbuster.com Website. Movielink is an online movie downloading business with libraries of digital content for both rental and sale. In November 2008, the Company launched BLOCKBUSTER OnDemand with the 2Wire MediaPoint digital media player, on-demand video solution that offers movie fans access through their television sets to BLOCKBUSTER OnDemand content, including thousands of titles from the latest movie releases to classic favorites.

International Operations

As of January 4, 2009, Blockbuster had 2,820 stores in 20 markets outside of the United States operating under the BLOCKBUSTER brand and other brand names owned by it. Of these stores, 892 stores were operated through its franchisees. In Canada, Italy, Mexico and Denmark, it operates store-in-store game locations, including freestanding game locations in Mexico, all under the GAME RUSH brand.

The Company competes with Wal-Mart, Best Buy, Target, GameStop, Movie Gallery, Netflix and Redbox.